Feb 17, 2009 6:00 am US/Pacific
Liberty Media To Invest In Sirius XM Radio
NEW YORK (AP) ―
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Liberty Media Corp. will invest $530 million in financially struggling satellite radio company Sirius XM Radio Inc., the companies said Tuesday. (File)
AP
Liberty Media Corp. will invest $530 million in financially struggling satellite radio company Sirius XM Radio Inc., the companies said Tuesday.
The investment on the first business day comes after Sirius warned it could file for bankruptcy as early as Tuesday if it cannot successfully negotiate with its debt holders.
As part of the deal, Liberty will provide a $280 million senior secured loan to Sirius, $250 million of which will be funded on Tuesday. Sirius will use the proceeds of the loan to repay $171.6 million of its maturing 2-and-a-half percent convertible notes that had been due Tuesday. The rest will be used for general corporate purposes.
The loan bears a 15 percent interest rate and matures in December 2012.
The second phase of Liberty's investment provides another loan of $150 million to Sirius's subsidiary XM Satellite Radio. Liberty has also agreed to offer to buy up to $100 million of the loans outstanding under XM Satellite Radio's existing credit facilities from the lenders.
In exchange, Liberty will get 12.5 million shares of preferred stock convertible into 40 percent of Sirius's common shares, and two seats on the company's board. The company said it expects Liberty Chairman John Malone and President and Chief Executive Greg Maffei to join the board of Sirius.
Shares of New York-based Sirius nearly doubled their value in premarket trading, jumping 9 cents to about 20 cents.
(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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