February 17, 2009 by Tom LeBlanc
It appears that Sirius XM Radio won’t have to file for bankruptcy thanks to a $530 million investment by Liberty Media Corp., according to the Wall Street Journal.
The satellite radio giant had hinted at http://www.electronichouse.com/article/sirius_xm_radio_preparing_for_bankruptcy” title=“possibly filing for Chapter 11”>possibly filing for Chapter 11 as soon as today. Speculation was that Charles Ergen, owner of Dish Network and EchoStar who recently bought up much of Sirius’ debt, might move to acquire the company.
Instead, it’s Liberty, a Colorado-based competitor of Ergen’s companies, that comes to Sirius XM’s rescue. The $530 million investment includes $250 million immediately in exchange for stock and seats on the board of the embattled satellite radio operator, according to WSJ.
It’s good news for well-paid satellite stars like Howard Stern and Martha Stewart. There was some speculation that, under bankruptcy, Sirius XM would be forced to terminate some of its large contracts.
It’s also good news for integrators since their clients’ satellite radio service isn’t likely to be interrupted. The bankruptcy was unlikely to have any ramifications for integrators who acted as resellers of satellite radio service or for those who installed satellite radio tuners.
Sirius XM has about $3.25 billion in debt, $175 million of which is owed at the end of February.
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