British music group EMI posted a £1.03 billion sterling operating loss for the year to end-March after writing down the value of its artists and catalogue, and said it risked breaking its banking covenants.
The group, owned by Terra Firma, said the loss included an impairment charge of £1.04 billion and restructuring costs of £136 million pounds.
It said the rapid decline in sales of CDs and uncertainty about the value of digital and online music markets had caused it to review the value of its music catalogues.
EMI recorded a net loss of £1.6 billion, against £412 million a year earlier, on revenue of £1.57 billion pounds.
It said in a statement today there would likely be a significant shortfall when its banking covenants were tested on March 31, 2010, and were therefore in discussions with shareholders on additional funding.
Terra Firma bought EMI at the height of the buyout boom in a £4 billion pound deal in 2007.
PA