The Times is reporting that Terra Firma is "close to completing a £250 million equity fundraising" after selling investors on its planned cost cutting and profit goals. (See my thoughts on cost cutting at EMI.) At £250 million, the 15% stake in EMI would value the company at the same £1.5 equity valuation at the time of acquisition.

The Times refers to documents seen by potential investors that refer to Terra Firma's grand plans for EMI: the cutting of £135 million in annual costs, outgrowing the market, higher margins in digital and ringtones (even though most everybody is in agreement ringtones have plateaued) and a planned exit in 2012. The documents have "suggestions" that EMI's recorded music business could be sold to a media company such as News Corp or Google that would "ideally placed to be a digital content engine for the broadband pipes of the future."

Extra reading on EMI and Terra Firma:

• "Embrace digital or die, EMI told"
• "EMI's Hands Squeezes Trade Bodies"
• "Terra Firma To Squeeze EMI Millions"
• "Letter From Guy Hands, the CEO of Terra Firma," November 2007. "There is no doubt that EMI is a tremendous challenge, but it is also a huge opportunity and our success or failure will not be correlated to the markets, but to our ability to effect change, quickly and decisively. It is this type of deal that Terra Firma focuses on and from which it makes money."