KPMG issues going concern warning for EMI
Accounts reveal extent of EMI troubles
KPMG has issued a going concern warning against music giant EMI, the home of
James Blunt and Take That, in accounts which
reports
say reveal the business lost more than £1bn in the year up to March 2009.
The warning comes in the accounts of Maltby Capital, the investment vehicle
which owns the recording label for private equity house Terra Firma, run by Guy
Hands.
There have been reports in the press that EMI could breach its banking
covenants.
In its report KPMG said that the group’s ability to continue as a going
concern rested on continued banking facilities and complying with the covenants
and that, in turn, relies upon the raising of further funds from shareholders.
KPMG also highlighted that a demand for more pension fund contributions to
fill a deficit would exacerbate the funding difficulties faced by the company.
“These conditions…indicate the existence of a material uncertainty which
may cast significant doubt on the group’s ability to continue as a going
concern. The financial statements do not include the adjustments that would
result if the group were unable to continue as a going concern,” KPMG’s report
concluded.