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EMI is struggling to meet its liabilities in Australia. Earlier this year, the UK-based music company was ordered to pay out any damages to Larrikin Music, after they sued them claiming that Men at Work’s No.1 hit ‘Down Under’ reproduced a “substantial part” of the children’s folk tune ‘Kookaburra Sits In the Old Gum Tree’.

Currently EMI is trying to raise capital, with directors now talking to Sony about licensing their library, which includes all The Beatles titles. However, while the company is struggling, no-one wants to deal with them.

EMI said that it is seeking to license its catalogue as a means of making a crucial loan repayment. The Company has already has seen two potential suitors pass on such a deal while “last remaining hope” Sony Music “is close to bowing out” as well,

The Wall Street Journal reported yesterday that the EMI parent company Terra Firma is looking to raise as much as $150 million to make a loan repayment to Citigroup, which helped finance its $3.6 billion takeover of EMI in 2007.

One fundraising tactic EMI has resorted to is potentially licensing its catalog to a competitor, who would pay as much as $150 million per year for the rights to market and distribute EMI titles in the U.S.

In addition to Sony, Universal Music Group was also reportedly in discussions with EMI — which ended last week — while The Journal refutes an earlier report that indicated Warner Music  was in talks as well.

The Journal notes that if EMI were still able to reach a licensing deal, it would “likely shut down most of its operations in the U.S.”

If Terra Firma and EMI are not able to work out a licensing deal or raise funds via other means to avoid defaulting on the payment, Citigroup could potentially “seize the company, break it up and sell it.”

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