EMI only avoided being taken over by its lenders last month because its private equity owner contributed enough cash to avoid default.
http://www.cbsnews.com/stories/2010/05/14/business/main6484271.shtml
The new funding comes after talks with rival music companies Universal Music Group, Sony Music Entertainment and Warner Music Group all failed in the last several months. EMI was seeking a partner to distribute its music in North America, which it hoped would raise enough cash to keep Citigroup at bay.
When those talks failed, Terra Firma had no choice but to inject more money into EMI. The funds artificially boost the company's profit to keep it above the required percentage of debt. The money also can be used by the company in its operations.
Through September of last year, Terra Firma had already put 105 million pounds into EMI to meet the loan ratio. It bought the company for 2.4 billion pounds in 2007.
While Hands and other investors can keep pouring in money, Terra Firma will have to fully repay the loan - now about 3.1 billion pounds - by 2015 or potentially lose the company to the bank.