More: Liberty/DirecTV Bail Out Sirius XM

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Posted by on February 17, 2009 at 10:19:45:

In Reply to: It's Official: Liberty/DirecTV Bail Out Sirius XM posted by on February 17, 2009 at 10:16:04:

Sirius XM And Liberty Media Reach Agreement

SIRIUS XM RADIO and LIBERTY MEDIA CORPORATION have entered into agreements where LIBERTY will invest an aggregate of $530 million in the form of loans to SIRIUS XM and its subsidiaries and receive an equity interest in SIRIUS XM.

Investments Funded In Two Separate Phases

The first phase includes a $280 million senior secured loan from LIBERTY to SIRIUS XM, $250 million of which will be funded TODAY. The proceeds of that loan will be used by SIRIUS XM to repay $171.6 million of its maturing 2 1/2% Convertible Notes due February 17, 2009, and the balance will be used for general corporate purposes, including working capital and transaction costs.

The second phase provides an additional loan of $150 million to XM SATELLITE RADIO, SIRIUS XM's wholly owned subsidiary. LIBERTY has also agreed to offer to purchase up to $100 million of the loans outstanding under XM SATELLITE RADIO's existing credit facilities from the lenders.

Upon completion of the second phase of the LIBERTY investments, SIRIUS XM will issue LIBERTY an aggregate of 12.5 million shares of preferred stock convertible into 40% of the common stock of SIRIUS XM. In addition, LIBERTY will receive seats on the SIRIUS XM Board of Directors proportionate to its equity ownership. It is expected that JOHN MALONE and GREG MAFFEI will join the SIRIUS XM Board of Directors. LIBERTY's obligation to consummate the second phase of its investment is subject to various closing conditions.

Karmazin, Maffei Comment

SIRIUS XM CEO MEL KARMAZIN 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."

"We are excited to be investing in SIRIUS XM. We have been impressed with the company, its operations and management team," said LIBERTY Pres./CEO GREG MAFFEI. "SIRIUS XM's ability to grow subscribers and revenue in a difficult financial and auto market is indicative of how listeners view this as a "must have" service."

(All Access)

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