Will Sirius XM Satellite radio claim bankruptcy?

Sirius could file bankruptcy as early as Tuesday
Feb 13, 2009 | Associated Press

Financially strapped Sirius XM Radio Inc. could file for bankruptcy as early as Tuesday if it cannot successfully negotiate with the holders of its debt. The satellite radio company said Friday that it has exchanged more than $172 million of debt maturing in December for new debt due in 2011. But the company still has about $175 million coming due this Sunday.

Sirius is fighting against attempts for control by Charlie Ergen, the chief executive of Dish Network Corp. and sister company EchoStar Corp. Ergen bought much of a $300 million batch of discounted Sirius bonds that come due next week. Sirius had rejected a previous offer by Ergen for control of the company. Liberty Media Corp. also is in talks with Sirius about possibly investing in the company.

http://www.breitbart.com/article.php?id=D96AR1484

Are we establishing that there is a difference between "bankruptcy" and "Ch 11"?

John Malone enters Sirius talks: Move could drive up Echostar's bid
February 14, 2009 | By Dade Hayes, Variety

Liberty Media topper John Malone has entered the satellite-radio fray, holding talks with Mel Karmazin about buying debt-laden Sirius XM and merging it with DirecTV. Most Wall Streeters watching the slow-motion implosion of Sirius are laying long odds against a Malone rescue, however. A few analysts issued reports Thursday saying the move is more likely a ploy to drive up a rival bid from EchoStar, parent of DirecTV competitor Dish Network. "We do not believe that Liberty initiated the dialogue with Sirius," wrote Collins Stewart analyst Tom Eagan. Management of industry leader DirecTV would likely not want the turnaround headaches of being saddled with the radio satcaster. So why would EchoStar chief Charlie Ergen want to own it? One simple theory outlined by Barclays Capital's Vijay Jayant: The bid "is an attempt to acquire a business he views as attractive at an appealing valuation." And it is certainly appealing. The market cap of Sirius XM is now about $260 million, down from more than $10 billion a year ago.

EchoStar has already been buying up a lot of Sirius' $3.25 billion in debt and has made unsolicited takeover offers over the past couple of months. With much of its debt coming due this year, Sirius XM is in dire straits. Its decimated stock closed Thursday at 7" a share, and the company has contacted advisers and attorneys to prep a possible bankruptcy filing. One issue for whomever controls Sirius is its obligations to prominent hosts such as Howard Stern. The company has lavished hundreds of millions of dollars on talent on the theory that an all-star lineup would drive subscriptions.

http://www.winnipegfreepress.com/entertainment/TV/null-39620377.html

For Bobyn42:

Chapter 11, Chapter 7, and Chapter 13 are all considered parts of the "Bankruptcy code" in the USA. Chapter 11 permits re-organization of a business. Chapter 7 is for governing the process of a liquidation bankruptcy. Chapter 13 is similar to 11, but for individuals, or small business with a small debt load (less than 1,010,650.00 in 2007). Since these are all chapters of the bankruptcy code, and of these chapters would count as Bankruptcy.

To further clarify: Outside of the USA, we don't use the term Chapter 11. That same act (re-organizational bankruptcy) is called bankruptcy protection (silly name since the company is filing for bankruptcy, though not liquidation, hence the "protection" bit). If Sirius XM files for "bankruptcy protection", that will also count as Chapter 11, and therefore bankruptcy.

Hope that helped!

Oooops, better correct myself on that last bit. The "bankruptcy protection" bit is what it's called in Canada. Not sure if other countries outside the USA use it too.

And ty to Lola for the updates!!

Sirius and Liberty Media Near Deal
February 16, 2009 | Reuters

PHILADELPHIA, Feb 16 (Reuters) - Liberty Media (LINTA.O) was near a deal to buy a major stake in Sirius XM Radio Inc (SIRI.O) that would save the satellite radio company from bankruptcy, Dow Jones reported on Monday. Meanwhile, a group of Sirius creditors will seek to remove Chief Executive Mel Karmazin if the company chooses a bankruptcy filing over a deal with an investor that would let it stay solvent, the Wall Street Journal said.

"Creditors will act quickly and definitively if they perceive that management is (not) acting ... in the best interest of the estate," the paper quoted Edward Weisfelner, a partner with Brown Rudnick LLP - the law firm representing the creditor group - as saying. "The management of Sirius XM is continually working to ensure the best possible outcome for the enterprise," a spokesman for Sirius said. Sources told Reuters last week that Liberty Media was talking to Sirius about a plan to invest in the satellite radio company but not take it over. The timing of an agreement was unclear.

The talks with Liberty are seen as a last-ditch attempt by Karmazin to hold off EchoStar, which holds $175 million in Sirius convertible bonds due on Feb. 17.

http://www.reuters.com/article/mergersNews/idUSN1632251620090216

Malone Comes to Aid of Sirius
By Kenneth Li & Andrew Edgecliffe-Johnson
February 16 2009 22:01 | The Financial Times

John Malone’s Liberty Media is expected to offer about $250m in a senior secured loan on Tuesday as the first step in a “multi-stage” deal to rescue Sirius XM ahead of an imminent debt deadline, one person familiar with the satellite radio group’s discussions said. The deal offered by Liberty would involve a debt for equity swap and would leave Mr Malone’s group, which controls DirecTV, the US satellite television company, with a “meaningful” stake in Sirius, this person said. It was not clear what other stages of the transaction would involve and details of the proposed deal have yet to be finalised, but a decision is expected by the end of business on Tuesday. Mr Malone’s offer is understood to be a two step process, according to the New York Post.

Liberty’s offer aims to thwart the advances of Charlie Ergen, chief executive of EchoStar and Dish Communications, the US satellite broadcasters, which offered to buy Sirius last year. Mr Ergen’s offer was rebuffed but since then he has accumulated Sirius’s debt and now owns a $175m tranche that comes due on Tuesday . Sirius told investors last week it would need to file for bankruptcy protection if it could not restructure its debt by Tuesday’s deadline. The group owes $3.25bn, with $1bn due this year. Creditors voiced concern over the weekend. Edward Weisfelner, a Brown Rudnick bankruptcy lawyer representing holders of about $173m of Sirius debt, warned that bondholders could seek to remove Sirius executives should it file for bankruptcy.

http://www.ft.com/cms/s/0/5ba89940-fc73-11dd-aed8-000077b07658.html

Sirius XM May Get Investment From Liberty to Avert Bankruptcy
By James Callan & Connie Guglielmo | Bloomberg News

Liberty Media Corp. may say as soon as today that it will provide hundreds of millions of dollars to Sirius XM Radio Inc. and help the pay-radio company avert bankruptcy, a person familiar with the matter said. John Malone’s Liberty Media is still negotiating a rescue for Sirius XM, said the person, who declined to be identified because the talks are ongoing and an agreement may not be reached. Sirius XM said last week it may be forced to file for bankruptcy as soon as today if it can’t refinance debt.

Sirius XM faces a deadline today to repay $175 million in bonds held by Charles Ergen’s EchoStar Corp., a satellite- equipment company. Either Ergen or Malone, who control the two largest U.S. satellite-television companies, would be able to use New York-based Sirius XM to integrate TV and radio services.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aaeLMEC6WSAE

Liberty Media Invests $530M in Sirius XM
Embattled satellite radio operator can pay off debts and avoid bankruptcy.
By Tom LeBlanc | February 17, 2009

02.17.2009 — 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 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.

http://www.cepro.com/article/liberty_media_group_invests_530m_in_sirius_xm

So if they got money and gave stock...isnt that a buy out?

No, like the press release states, it is an investment. The $530 million gets 40% of the Sirius stock and two seats on the board of directors. A buyout would be a 100% acquistion. Of course, Liberty could make a move to attempt a total takeover months from now like they have done with other companies in the past.

NASDAQ Grants Exception

NEW YORK, Feb 19, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- SIRIUS XM Radio (Nasdaq: SIRI) announced today that NASDAQ had granted the Company's request to issue new preferred stock in connection with its previously announced agreements with Liberty Media Corporation without shareholder approval.

(Logo: http://www.newscom.com/cgi-bin/prnh/20080819/NYTU044LOGO )

Liberty Media's investment will be funded in two separate phases. 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. Details regarding the transaction are available in the Current Report on Form 8-K the Company filed with the Securities and Exchange Commission on February 17, 2009.

While the NASDAQ rules generally require shareholder approval prior to the issuance of securities that are convertible into more than 20% of the outstanding shares of a listed company, the Company is relying on an exception in cases when the delay in securing shareholder approval would seriously jeopardize the financial viability of the enterprise. The Company's Audit Committee has approved the use of this exception.