Citigroup Inc recently rejected a proposal from Guy Hands' private equity firm Terra Firma Capital Partners to restructure the debt of music group EMI, the Wall Street Journal said on Monday.

The buyout firm had offered to inject about £1 billion ($1.68 billion) into EMI in exchange for Citigroup waving a similar proportion of its $2.6 billion of EMI loans, the paper said, citing people familiar with the matter.

Citigroup would have had to write off more debt than it was comfortable with, the paper said, citing one of the people.

"Per today's news articles, we can confirm that we have made an offer involving the injection of £1 billion into EMI to resolve its capital issues," said Terra Firma in a statement. "We continue to believe EMI is an excellent company and we remain committed to doing all we can in the best interests of EMI, its employees and artists, our investors and all stakeholders."

Terra Firma struck its ill-fated £4 billion buyout of music business EMI at the height of the buyout boom in 2007.

The ailing music group accounted for the vast majority of Terra Firma's €1.37 billion ($2.05 billion) writedown this year and Terra Firma was forced to inject extra capital into EMI twice in just six months.