EMI's accountants have raised “significant doubt” about its ability to continue as a going concern in a report that lays bare the parlous state of Terra Firma's ￡4.2bn ($6.6bn) investment in the music company behind Katy Perry and The Beatles.

Guy Hands, Terra Firma's founder and chairman, has written to investors in two of its private equity funds asking them to inject another ￡120m, according to one person familiar with the company. He must come up with the money by June 14 or face losing the company to Citigroup, his bankers.

However, accounts for the year to March 2009, released yesterday, make clear that even if Terra Firma secures this equity, it will face another “significant shortfall” against a test on covenants in its loans by March 2011. Unless it can persuade Citi to restructure its ￡3.2bn in loans by then, investors face further cash calls. Terra Firma spent ￡105m to make up shortfalls against the quarterly covenant tests last year but has less than ￡10m left for future payments.