Hands shows EMI how to do it "my way"

By Mathieu Robbins and Kate Holton

LONDON (Reuters) - British financier Guy Hands sold art door-to-door while he was at university and played Lady Macbeth in a school play.

He now has to put his creative talent for engineering upheavals to work as he tries to revolutionize life at venerable British music giant EMI and make his 2.4 billion-pound ($4.7 billion) investment a success.

Hands, 48, and his buyout firm Terra Firma are facing the dual problems of major changes in the music business and a slowdown in financing as they fight to turn around the ailing music company.

As the credit crunch hurts his ability to raise debt from his assets, he has had to go back to investors for more cash.

Hands, widely viewed as having invented the financial instrument of securitization -- or issuing debt backed by a business's cash flow -- distanced himself from the practice in 2005, saying it removed companies' flexibility to make changes.

And at EMI he has been forced to look for an alternative plan. On Tuesday he announced proposals to revamp the business by cutting up to 2,000 staff and said he would make the company more artist-driven.

Hands, who once regaled employees with a karaoke rendition of "My Way" after losing out on a big deal, spent Tuesday in meetings with his new employees to explain his vision.

While most kept quiet as they left the building, his big-name acts have not been so discreet.

British group Radiohead left last year, describing management as behaving like "confused bulls in a china shop", while Paul McCartney quit, saying the company was "really very boring". Robbie Williams, one of EMI's biggest-selling artists, is considering his options, his manager has said.

Regarded as hardworking and impulsive by peers, Hands is an unusually straight-talking, candid figure who does not appear to have been swayed by the criticism.

The 48-year-old told Sky News on Tuesday he was not part of a popularity contest and said his job was to return EMI "as a great British institution" back to success. The group has been hit by Internet piracy, falling CD sales and a poor release schedule.

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He told reporters last year that he gets really excited when he finds the worst business he can in the most challenged sectors.

"We get really happy if it's really, really bad," he said. "EMI, our most recent investment, is a classic example. We're just hoping EMI is as bad as we think it is."

Hands made his name at Nomura in the mid-1990s, snapping up struggling companies in some of the biggest leveraged deals of the time before striking out on his own in 2002 with Terra Firma Capital Partners, with the Japanese bank as an investor.