Pop star Michael Jackson, in a bid to stave off insolvency, said on Thursday he has reached a deal with creditors to refinance more than $200 million in loans secured by his prized stake in the Beatles' song catalog.
The loans, which formally came due in December 2005, are held by the Fortress Investment Group, a New York private equity fund that stood to gain Jackson's 50 percent interest in Beatles publishing rights, valued at some $500 million, in the event of a default.
A statement issued from Jackson's representatives in the Persian Gulf state of Bahrain, where he currently resides, said the singer has "restructured his finances" with help from Sony Corp., which jointly owns the collection of more than 200 Beatles tunes through Sony/ATV Music Publishing.
Jackson "has restructured his finances with the assistance of Sony Corporation of America," said the statement issued by Grahame Nelson of Qays H. Zubi Attorneys & Legal Consultants, who said he was speaking for Jackson.
"Following negotiations with several leading financial institutions, Mr. Jackson has concluded refinancing with affiliates of Fortress Investment Group, the lender that currently holds secured debts that were previously held by Bank of America," the statement said.
Qays H. Zubi Attorneys & Legal Consultants was part of an advisory team that included Bahrain-based financial adviser Ahmed Al Khan, it said.
Jackson's U.S. spokeswoman, Raymone K. Bain, said Qays Zubi is an adviser to Jackson but she could not confirm the contents of the news release issued from Bahrain.
Sony ATV, Fortress and Nelson did not return calls from The Associated Press seeking comment after business hours.
It also said Citigroup bank "structured the transaction for the parties."
But terms of the new financing deal were not disclosed, and it was not immediately clear whether Jackson was forced to give up any of his stake in the song catalog.
The New York Times, citing sources briefed on the refinancing negotiations, reported earlier that Jackson would agree to provide Sony with an option to buy about 25 percent of the catalog, or half of his stake, at a set price.
Sony's interest in keeping Jackson solvent stems from its desire to avoid a default that would allow his stake in the publishing venture to go up for auction, and the possibility of another company bidding on it. Sony representatives were not immediately available for comment.
According to prosecution testimony during his trial on sex abuse charges last year, Jackson had borrowed heavily against his assets, including more than $200 million secured by his share in Sony/ATV. Those loans, first provided by Bank of America Corp., were later sold to Fortress.
Rights to the Beatles music passed to the conglomerate ATV through its purchase of the band's publishing company, Northern Songs, in 1969.
Jackson in turn acquired the 4,000-song catalog, including the Beatles titles, when he bought ATV from the late Australian tycoon Robert Holmes a Court in August 1985. Ten years later, Jackson cut his stake in the catalog to 50 percent after merging ATV with Sony's publishing. Jackson also kept a 50 percent stage in new songs added to the collection.
The Sony/ATV catalog also includes songs like Bob Dylan's classic "Blowin' in the Wind" and the works of such artists as Joni Mitchell and Stevie Nicks. But the Beatles' rights account for an estimated two-thirds of the collection's value.
Industry experts say the catalog is one of the most treasured in the world, especially since the recent explosion in music licensing ranging from movies and television ads to cell phone ringtones and video games.
Source: Reuters/AP/MJJF/eMJey