Feeds

Sirius XM gets 11th-hour $530m loan

Bankruptcy avoided. Why so Sirius?

Securing Web Applications Made Simple and Scalable

Sirius XM Radio has been saved to broadcast another day by US cable tycoon John Malone.

The financially troubled satellite radio provider was tossed a last-minute lifeline Tuesday by Liberty Media, an entertainment conglomerate chaired by Malone that owns a 50 per cent stake in DirecTV.

A $530m rescue financing deal will stave off Sirius' immediate threat of declaring bankruptcy as well as keep its assets out of the clutches of DirecTV's rival, Dish Network.

Liberty Media said it will inject the $530m loan into Sirius' coffers in two phases; an immediate $280m loan to pay off notes due today and a second round of $150m aimed specifically at the company's XM Satellite subsidiary. Liberty will also offer to purchase up to $100m of XM's loans.

The move blocks a bid by Dish Network CEO Charles Ergen who has been attempting to gain control of Sirius XM through purchasing its distressed debt. Ergen has offered to restructure the loans in return for control of the company, but Sirius XM turned him down.

Instead, Sirius has thrown itself to the mercy of Liberty, which gets 12.5 million shares of preferred Sirius stock convertible into a 40 per cent stake in the company. Liberty also gets 40 per cent of the seats on Sirius XM board of directors. The company said Malone and Liberty CEO Greg Maffei are likely to take those seats.

"We are pleased to have come to this agreement with Liberty Media, particularly in light of today's challenging credit markets," said Sirius XM CEO Mel Karmazin in a statement.

The satellite radio company taken on most of its debt when subscriber growth was booming and before the recession made creditors holding on to their cash for dear life.

Under the deal, Sirius XM will need to pay the Liberty loan at an interest rate of 15 per cent due in December 2012. ®

Bootnote

In which we present the Sirius XM loan in the form of a one act screenplay.

FADE IN: INT. SIRIUS XM HEADQUARTERS IN NEW YORK CITY

SIRIUS XM
I CAN'T pay the rent!
ERGEN
You MUST pay the rent!
SIRIUS XM
But I CAN'T pay the rent!
ERGEN
But you MUST pay the rent!
LIBERTY MEDIA
I'll pay the rent!
SIRIUS XM
My hero!
ERGEN
Drat, drat, and double drat!

FADE OUT: EVERYONE LIGHTS CIGARS MADE UP OF ROLLED-UP $100 BILLS AND LAUGHS.

Build a business case: developing custom apps

More from The Register

next story
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Want to beat Verizon's slow Netflix? Get a VPN
Exec finds stream speed climbs when smuggled out
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Mobile application security vulnerability report
The alarming realities regarding the sheer number of applications vulnerable to attack, and the most common and easily addressable vulnerability errors.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.