EMI in licensing talks to raise 400 mln stg-report

LONDON, March 21 (Reuters) - British music company EMI is in talks to allow rival labels to manage its back catalogue in order to raise funds and prevent a takeover from its lender, reported the Sunday Times.

EMI, which is owned by Guy Hands' private equity group Terra Firma, is trying to put in place a new business plan as it faces a covenant shortfall on its 2.6 billion pounds ($3.95 billion) debt [ID:nLDE62F1E1].

The group is offering other labels the chance to manage its North American catalogue business for a five-year period, which Terra Firma thinks could raise 400 million pounds, enough to stave off a looming takeover by lender Citigroup, the newspaper said.

EMI declined to comment. ($1=.6580 Pound) (Reporting by Rosalba O'Brien; Editing by Hans Peters)