Terra Firma has recently put about £10 millon ($14.8 million) into EMI in order to prevent the major defaulting on its £2.7 billion ($4 billion) Citigroup loan, according to the Wall Street Journal.

The report says that Terra Firma may have to inject further cash into EMI in March to avoid a default, as the major does not have a big run of Q4 releases to bring in revenue. However, Coldplay, Katy Perry and the latest "Now" release continue to perform well; the major's 2009 schedule includes new albums by Lily Allen, LaFee, Keith Urban, Pet Shop Boys, J. Holiday, the Red Jumpsuit Apparatus, Depeche Mode, Beastie Boys and Massive Attack.

Terra Firma raised £250 million ($371 million) last year for contingencies, which would be used if an injection of funds is necessary, sources told the WSJ. The private equity firm paid £2.4 billion ($3.56 billion) for EMI in May 2007.

The market view would appear to be that an EMI loan default has become more likely: it currently costs £931,000 ($1.38 million) to insure £10 million ($14.84 million) of EMI debt, up from £868,000 ($1.29 million) a month ago, according to data provider Markit.

However, EMI's internal forecasts state that it will have enough cash: EMI expects to generate £280 million ($416 million) in earnings before interest, tax, depreciation and amortization in the fiscal year ending March 30, a source told the paper.

Asked about the challenges in meeting its financial covenant with Citigroup, EMI Music CEO Elio Leoni-Sceti told Billboard last month: "You will not hear me saying this 100%. I think it would be silly for any company. But I tell you I'm very comfortable with meeting the covenant."

A source told Billboard.biz that EMI Music has turned an operating loss into an operating profit for the six-month period to the end of September. EMI Publishing continues to perform better than the recorded music business, increasing earnings for the year ending March 31 compared to 2007.

EMI's share of album sales fell to 9.2% in the U.S. in the first three quarters from 9.7% a year earlier, according to Nielsen SoundScan.

EMI has had some recent global successes, including Italy's Tiziano Ferro who debuted at number one in Italy with his new album "Alla Mia Eta" (Capitol) in October, and Herbert Groenemeyer's best of album "Was Muss Muss" (Capitol) debuted this month at the top of the German and Austrian charts this month.

Capitol Records Nashville's Darius Rucker debuted at No. 1 on Top Country Albums and No. 5 on the Billboard 200 in September.

Terra Firma and EMI did not comment.