Sirius: Sorry, Charlie
by John Paczkowski
Posted on February 17, 2009 at 6:09 AM PT
Looks like Sirius XM can shelve that bankruptcy filing it’s been preparing these past few weeks–for the time being, anyway. This morning, the struggling satellite radio company announced an 11th-hour deal with John Malone’s Liberty Media that will allow it to meet a Feb. 17 debt deadline that might otherwise have forced the company into Chapter 11 bankruptcy protection. Under its terms, Liberty will provide Sirius (SIRI) with $530 million in loans, a portion of which will be used to repay $171.6 million of its maturing convertible notes, due today. In return, Liberty (LINTA) will receive 12.5 million shares of Sirius XM preferred stock and a couple of seats on Sirius XM’s board.
Not the greatest of terms. Still, Sirius CEO Mel Karmazin has managed to save the company from bankruptcy and from satellite mogul Charlie Ergen without accepting a change in control for the company. And the deal is not subject to the approval of the Federal Communications Commission.
“This agreement enables Sirius XM to continue to develop the opportunities first outlined in the merger of Sirius and XM,” said Sirius CEO Mel Karmazin. “By strengthening our capital structure and enhancing our financial flexibility, this investment allows us to continue providing the great content and innovative programming our subscribers know and love.”
At 20 cents, Sirius shares are up an astonishing 85.89 percent on news of the deal.
PREVIOUSLY:
- Call Me Mel “Save-My-Own-Keister” Karmazin
- Sirius-EchoStar-Liberty: Ménage-à-Blah
- Sirius: Give Me Liberty or Give Me Ergen
- A Bankruptcy Filing, Mel? Surely You Can’t Be Sirius…
- Sirius Rolls Out New 24 Hour Investor Keening Channel
- Sirius Debt Problems? Call EchoStar! No Upfront Fees!
- Sirius XM: The Beginning of the End or the End of the Beginning?
- Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13’s…
- Trade You 77 shares of SIRI for 1 Month of “Sirius Everything”
Comments
Another day of survival is good for Sirius. Still, I don’t think satellite radio has a long term future. It’s a great invention but 10 years too late. I see people like Howard Stern eventually having program being entirely downloadable.
Posted by Ken Okel at February 17th, 2009 at 6:39 am