Sirius XM News » sirius xm bankruptcy

Sirius XM weighs up Liberty Media financing offer

SXMN — Mon, 16 Feb 2009 02:05:15 +0000

Sirius XM is weighing up a financing offer from Liberty Media ahead
of a deadline tomorrow to repay $175m in bonds in a potential
transaction seen as thwarting EchoStar’s attempt to take over the US
satellite radio company, according to a person familiar with the
discussions.

A decision from the company is not expected until at least late today (Monday) or sometime tomorrow (Tuesday).

Liberty Media is offering a senior
secured loan that will allow Sirius
XM to repay $175m in bonds held by EchoStar that are due by Tuesday
or risk filing for bankruptcy protection.

The offer from Liberty, which could later involve strategic
partnerships between Sirius and DirecTV, is viewed as a more friendly
offer and does not contemplate a takeover of the company while leaving
Mr Karmazin to run the company.

Mr Malone sees the proposed deal as a “good financial investment”, the person said.

According
to a Wall Street Journal report last week, EchoStar is considering
injecting $500m to take control of Sirius and Mr Ergen is now prepared
to let Mr Karmazin keep his job.

Sirius XM’s total debt now stands at about $3.25bn with $1bn due this year.

Since
rebuffing an offer from Charlie Ergen’s EchoStar to take over Sirius XM late last year, Mr
Ergen has been buying Sirius debt.

Sirius does not have enough cash to repay the $175m in bonds that are due on Tuesday.

The
discussions pit three of the media’s biggest power brokers in a battle
that could determine the future of the sole satellite radio company in
the US.

More on this Tomorrow or Tuesday depending on released information.

[Via: FT.com]

Sirius XM To Reiterate Bankruptcy Potential On Tuesday

SXMN — Fri, 13 Feb 2009 16:38:21 +0000

Sirius XM Radio Inc. reiterated Friday it may be forced to
file for bankruptcy protection as early as Tuesday as the company
continues refinancing talks for $175 million in bonds that mature
Tuesday. The disclosure came as the debt-laden satellite-radio
provider announced it exchanged $172.5 million in notes that come due
in December for new notes that come due in June 2011.

The Wall Street
Journal reported Friday that Sirius XM has significantly narrowed the
divide in talks with satellite mogul Charles Ergen over a deal to save
itself from bankruptcy. But the country’s sole satellite radio
operator continues to discuss a rival offer from Liberty Media Corp.,
according to people familiar with the situation. Ergen, who controls
Dish Network Corp. (DISH) and EchoStar Corp., began acquiring
Sirius XM debt in the fall. He has offered to inject about $500
million into Sirius XM and restructure the debt he holds in the
company in return for control. His offer is contingent on the
successful renegotiation of about $600 million in Sirius bank loans
and about $200 million in other debt.

Ergen had made an unsolicited
offer to take control of Sirius XM last year, but the company rebuffed
it. Liberty Media, which controls Dish Network rival DirecTV Group
Inc., has said it would make an investment that would enable
Sirius XM to meet its credit obligations in exchange for a sizable
stake, a person close to the situation told the Journal earlier this
week. After Sirius’ merger with rival satellite-operator XM was
approved in July, it began planning to refinance its debt. Yet within
weeks of the deal’s close, the financial crisis began to envelop Wall
Street, making it all but impossible for companies to tap the credit

markets. Sirius shares were recently up 3 cents at 10 cents.

Deal with Liberty Unlikely say analysts

SXMN — Fri, 13 Feb 2009 13:33:29 +0000

With only days to go until a critical deadline, Sirius XM Radio is still in talks with potential investor Liberty Media Corp, a person familiar with the matter said on Thursday.

But analysts said Liberty, led by cable mogul John Malone, is unlikely
to help the Sirius satellite radio service since that could complicate
his own long-term satellite plans.

Liberty Media is in the process of splitting off most of its Liberty Entertainment unit, which owns the majority stake in U.S. satellite TV operator DirecTV Group Inc.

“We believe it is highly doubtful that Liberty makes an investment
in or acquires Sirius,” Collins Stewart analyst Thomas Eagan wrote in a
note Thursday. “Adding Sirius to (Liberty) would complicate any
transaction with DirecTV.”

Moreover, Eagan said DirecTV’s management does not want Sirius, the
biggest provider of satellite radio service with more than 19 million
subscribers, combined with its operations.

“DirecTV certainly does not need it,” he said. “Their operations lead the industry.”

[Via: Reuters]

Sirius XM Subscriber? You are Okay! Investor? Get out now!

SXMN — Wed, 11 Feb 2009 22:45:29 +0000

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%