Private equity firm Terra Firma expects Citigroup to share in the pain of restructuring music business EMI, according to Guy Hands, the buyout firm's founder and chairman.

Citigroup, which holds EMI's debt of about £2.6 billion ($4.3 billion), and Terra Firma are in constructive discussions over renegotiating the debt burden, Hands said.

"[Discussions] are about how much each side shares in the pain," he told reporters on the sidelines of the Nov. 18 SuperInvestor private equity conference in Paris.

Citigroup recently refused a proposal to cut the debt pile by £1 billion ($1.7 billion) in return for a similarly sized equity injection, a source familiar with the matter said.

Terra Firma bought EMI at the height of the buyout boom in 2007 in a £4 billion ($6.7 billion) deal.

The ailing music group accounted for the vast majority of Terra Firma's €1.37 billion ($1.96 billion) of writedowns this year and Terra Firma was forced to inject extra capital into EMI twice in just six months.

EMI, which re-mastered and re-released the Beatles entire back catalog in September, has increased earnings at its recorded music division fourfold under Terra Firma ownership, Hands said.