According to a story on CNN Money if you’re one of the nearly 19 million subscribers, there is hope. Even
if the company files for bankruptcy, analysts think it was more likely
to be a reorganization, not a liquidation.
“It’s hard to imagine the company will go away. It will survive in one
form,” said Joe Bonner, an analyst with Argus Research. “There are
assets there. Sirius XM has nearly 20 million customers that seem to
like their service. That’s nothing to sniff at.”
As for investors things might not be so great. Even if the company resolves the issue of next week’s debt maturation, it still has even more debt due later this year. If the company files for bankruptcy, investors are likely to be wiped out.
According to the article even if Sirius XM CEO Mel Karmazin gives in and strikes a deal with
Ergen, the most plausible outcome is that Ergen converts his debt into
an equity interest in Sirius XM — which would dilute the stake of
existing shareholders.
You can read the rest of the story at the link above, but the title of this post sums everything up.
Also SIRI Closed today at 0.0550 down -51.71%
According to The New York Times Sirius XM Radio has been working with advisers to prepare for a possible bankruptcy filing in a move that could put pressure on the satellite company EchoStar, which owns a substantial amount of the company’s debt.
Sirius has been working with the restructuring expert Joseph A. Bondi
of Alvarez & Marsal and the bankruptcy lawyer Mark Thompson of
Simpson, Thatcher & Bartlett to help prepare a Chapter 11 filing,
people close to the company said. The documents and analysis are close
to being completed and a filing could come within days, according to a
person familiar with the matter.
With more than $5 billion in assets, Sirius would be second-largest
company to file for Chapter 11 bankruptcy protection so far this year,
according to the research firm Capital IQ’s database. Smurfit-Stone,
which had more than $7 billion in assets when it filed in late January,
was the biggest so far.
More on this story as the news comes in.
BusinessWeek has an interesting article discussing Sirius XM Radio’s more than $1 Billion Debt they will have next year.
Sirius XM Radio has more than $1 billion in debt coming due next year, and it
doesn’t have the money, at least not yet. Mel
Karmazin has tried to reassure investors that the company will find the
necessary funding, but the questions keep coming. “Am I going to lend
the company the money? I hope not,” he joked last month. “I hope we
don’t get to that.”
Despite the merger and a combined 18.6 million subscribers, Sirius XM
has seen its stock tumble from 3.94 last December to 31¢ as of Oct. 22.
Analyst James Ratcliffe of Barclays Capital
estimates that Sirius needs to raise $750 million to $800 million to
cover its debt repayments, programming costs, and capital spending for
next year.
Sirius says it can continue to fund operations and avoid filing for
bankruptcy. Executives expect to be able to raise money to meet debt
payments due in February and they anticipate that existing lenders will
be flexible about an additional $350 million due in May. “We are very
confident of taking care of the [$270] million in February, and we are
confident the banks will extend the maturity in May,” says David J.
Frear, chief financial officer for Sirius XM Radio.
[Via: BusinessWeek]
sirius stock, sirius bankruptcy, sirius debt
