LONDON (AP) — The parent company of EMI Group PLC said yesterday it may need further equity injections over the next year as the music group continues to struggle under a debt burden despite big sellers from the Beatles and Katy Perry.

Maltby Capital said that EMI, which is also home to Coldplay, Lily Allen, Pink Floyd and Norah Jones, has enough cash to meet current obligations on its £3 billion ($4.7 billion) debt but added that it will likely need more funding to avoid breaching debt covenants going ahead.

Maltby's annual report revealed that EMI made a £512 million loss in the year to March 31, significantly less than the £1.57 billion loss it reported last year.

Revenue rose five percent to £1.65 billion, driven by the release of the remastered Beatles' catalogue and hits from new artists including Katy Perry, who has sold around six million albums worldwide, and country band Lady Antebellum, the top seller of the year in the United States.

"This report shows the very real operational progress that EMI has made in the past three years, in the face of the serious challenges faced by the music industry and the wider economy," said Maltby chairman Stephen Alexander.

EMI has struggled more than most other recording groups amid a decline in CD sales following the departure of key artists.

The London-based company came close to collapse a few months ago after talks with rival music companies Universal Music Group, Sony Music Entertainment and Warner Music Group about various forms of a tie-up or distribution deal failed.

It was saved by a further injection of capital from Guy Hand's private equity firm, Terra Firma, which bought EMI for around £2.4 billion in 2007, warding off foreclosure by its main lender, Citigroup.

Maltby, the holding company set up by Terra Firma to run EMI, said yesterday that the music group still faces significant challenges, including the £3.04 billion in debt that falls due for repayment between 2014 and 2017.

"Even though EMI generates more than enough cash to service the interest payments on its current borrowings, we need to address a set of banking covenants that tighten steadily over the coming years," it said. "Further equity cures may well be required particularly in March 2011."

The report said the debt situation, plus a large hole in the company's pension fund, raised doubts about its ability to operate, but said that "after making enquiries ... the directors have concluded that they have a reasonable expectation that the group as a whole has adequate resources to continue as a going concern for the foreseeable future."

New CEO Roger Faxon has set about restructuring the business and carrying out a cost-cutting programme of the bloated business. An early step was combining under one global head EMI Recorded Music, the record label, and EMI Music Publishing, which makes steady profits from owning the rights to a vast back catalogue of songs.