Honey I shrunk the pension fund
There has been quite a lot of interest in the fate of my (and a lot of other people's) EMI pension following my post in October last year. Another letter arrived from the EMI Group Pension Trustees today which says:
'In mid December we reached an agreement in principle with EMI and its ultimate investor, Terra Firma, that the Fund would be granted a meaningful amount of watertight security, which would rank equally with the security granted by EMI to Citi, the bank that loaned Terra Firma the money to take over EMI.
Since that agreement, however, detailed discussions have revealed that the form of security offered does not rank equally with the bank's in certain important respects and is not sufficiently robust in its terms for the Trustee to be able to rely on it in circumstances where it would be needed to support the Fund. In the absence of meaningful and watertight security, and as EMI is not prepared to put forward an alternative funding package, the Trustee has concluded, with regret, that it has no option other than to inform the Pensions Regulator that there is no reasonable prospect of reaching agreement with EMI and Terra Firma on funding.'
As EMI's new owner Guy Hands, whose personal wealth with his wife is estimated to be £200m, said in a recent interview - 'We will fight to come up with a solution to the problems that face the entire recorded music industry'. It's a pity that the solution doesn't seem to include staff pensions.
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