Citigroup (C) has taken over storied U.K. record label EMI Group less than three months after a jury ruled that the bank didn't commit fraud when it sold the record company to private-equity group Terra Firma for $4.7 billion in 2007.

The bank, which was both the seller and the lender in the 2007 deal, foreclosed on the record company and regained ownership. In the foreclosure process, Citigroup cut EMI's debt by 65% to 1.2 billion British pounds ($1.94 billion) while providing it with a cash balance of more than 300 million pounds, EMI said Tuesday.

"The recapitalization of EMI by Citi is an extremely positive step for the company, EMI 's CEO Roger Faxon said in a statement. "It has given us one of the most robust balance sheets in the industry with a modest level of debt and substantial liquidity.

The cash balance will stabilize operations at EMI, which boasts a roster that previously included the Beatles and Pink Floyd and now includes Coldplay and Katy Perry. The company said last year that it had suffered an "unprecedented market decline."

Terra Firma was set to default on about 3.4 million pounds of debt next month, The Associated Press reported.

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