Sirius XM Saved From Bankruptcy By Liberty Media
Talk about cutting it close. Just as many pundits were expecting the
recently united Sirius XM to file for bankruptcy today as it stared
down a huge loan payment, John Malone's
Liberty Media has swooped in to save the day. The company, which just
so happens to be the parent of DirecTV, has signed a last minute
agreement that will prevent the satellite radio company from having to
file for Chapter 11.
As part of the deal, Liberty's chairman (John Malone; pictured) and chief executive (Greg Maffei) are expected to join Sirius's board of directors, and after a pledge of $530 million, we can't say we blame them for wanting a say in things. The investment won't all arrive at once, with "just" $280 million landing immediately in order to pay off some $171 million in debts. The second wave will consist of a "$150 million loan and an agreement to buy an additional $100 million in loans from other lenders." When this so-called second phase is complete, Liberty Media will acquire 12.5 million preferred shares convertible into a 40 percent common equity stake.
For those diligent Sirius XM listeners, this all means that you won't have to worry about your subscription abruptly ending or your tech support calls going unanswered in the near future, though you can bet this won't save you from those impending price hikes.
As part of the deal, Liberty's chairman (John Malone; pictured) and chief executive (Greg Maffei) are expected to join Sirius's board of directors, and after a pledge of $530 million, we can't say we blame them for wanting a say in things. The investment won't all arrive at once, with "just" $280 million landing immediately in order to pay off some $171 million in debts. The second wave will consist of a "$150 million loan and an agreement to buy an additional $100 million in loans from other lenders." When this so-called second phase is complete, Liberty Media will acquire 12.5 million preferred shares convertible into a 40 percent common equity stake.
For those diligent Sirius XM listeners, this all means that you won't have to worry about your subscription abruptly ending or your tech support calls going unanswered in the near future, though you can bet this won't save you from those impending price hikes.
