EMI pensions blow for Hands

Guy Hands' buyout group Terra Firma reportedly faces up to £170 million in additional pension fund charges on its purchase of music publisher EMI.

Talks with the trustees of the company pension scheme broke down over fears the scheme could lose out to other creditors.

"In certain events like restructuring or asset sales, we would have been frozen out," said Ian Smellie, chairman of the trustees. "Taken to the extreme, all of the assets of the company could have been sold and we would be left with nothing." Now the pensions regulator will decide how much additional cash the scheme ought to hold.

Smellie said the 22,000-member scheme had a shortfall of between £50 million to £170 million depending on EMI's expected performance.

EMI Music Publishing chief executive Roger Faxon said the credit-market crisis had not hampered Terra Firma's ability to raise cash for EMI.

"Terra Firma is a big fund with lots of liquidity and partners," he said.