Liberty Media has come to the rescue, so to speak, of troubled satellite radio provider Sirius XM, in the form of $530 million in loans to be delivered in two phases.
- The first phase includes a $280 million senior secured loan from Liberty Media to Sirius XM, $250 million of which will be funded today.
- The second phase provides an additional loan of $150 million to XM Satellite Radio, SIRIUS XM's wholly owned subsidiary. Liberty Media has also agreed to offer to purchase up to $100 million of the loans outstanding under XM Satellite Radio's existing debt obligations from the lenders.
Liberty Media's offer aims to thwart the (unwanted) advances of Echostar, parent company of Dish Network. Liberty Media owns DirecTV, so you can see the obvious idea behind the rescue plan.
Echostar tried to buy Sirius last year, but was turned down. Since then, however, the company has been acquiring Sirius XM debt, and about $175 million was to come due on Tuesday. Without the lifeline offered by Liberty Media, Sirius XM would have faced bankruptcy.
Besides "Thanks!," Mel Karmazin, Chief Executive Officer of SIRIUS XM Radio, said:
"We are pleased to have come to this agreement with Liberty Media, particularly in light of today's challenging credit markets. Liberty's investment is an important validation of what SIRIUS XM has already achieved and a vote of confidence in what we will achieve. This agreement enables Sirius XM to continue to develop the opportunities first outlined in the merger of Sirius and XM. 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."
Comment and add to the story without registration, but keep the comments meaningful please. Links are not accepted.
