Bridge loan could save Sirius XM from Ergen’s grasp

By on February 14, 2009 at 3:46 PM.

Bridge loan could save Sirius XM from Ergen’s grasp

This past week we gave you a brief glimpse into the nightmare that Sirius XM’s business has become and since then things have basically been a cluster… err, mess. Sirius did take a big step in restructuring some of its future debts – $172.5 million that was due in December is now due in June 2011, a move that cost the company 60 million shares of stock. Forget the fact that Sirius XM has $227.5 million of December debt remaining, it also still has $175 million that comes due to Dr. Claw Charlie Ergen and EchoStar this Tuesday and another $350 million due in May. For the time being, the only thing standing between Sirius XM and bankruptcy is Ergen’s willingness to take control of the company, a fate Sirius XM seems to adamantly oppose. But wait! What’s that? A hero emerges to save the day? John Malone and his company Liberty Media are rumored to be in negotiations with Sirius XM at this very moment and may gobble up a healthy chunk of the satellite radio provider’s debt in order to stave off bankruptcy filings or worse yet from the looks of things, Ergen. A quick look at Sirius XM’s near-future debt calendar:

  • $175 million due this Tuesday (to EchoStar)
  • $350 million due in May (to JPMorgan Chase and UBS AB, among others)
  • $227.5 million due in December
  • $172.5 million due in June 2011

That’s right folks, a shade under a billion. To make matters slightly worse, the aforementioned shift of $172.5 million that excited investors on Friday is contingent upon Sirius XM paying Ergen on Tuesday. If it doesn’t come up with the dough, no deal. In the end, Tuesday is basically D-Day for the struggling company and either Liberty or a mysterious third-party must swoop in and save the day. In either of those cases however, Sirius XM is merely looking at a band-aid until May when it will have to come up with another $350 million. We hope Mel and the gang have channel 35 programmed as a favorite – they’re going to need it.

[Via SAI]

Read

14 Comments

Sirius XM staring down bankruptcy filing, Ergen tries to swoop

By on February 11, 2009 at 9:19 AM.

Sirius XM staring down bankruptcy filing, Ergen tries to swoop

It might not have happened exactly as terrestrial radio had planned while it was sitting in the shadows, stroking a hairless cat and plotting the downfall of satellite, but it looks like the delays it caused by lobbying against the Sirius XM merger may have ended up doing enough damage. According to a report from the New York Times, the only game in satellite radio town is preparing to file for bankruptcy. With over $5 billion in assets the company would surely be gobbled up one way or another, but its current debts of $3.25 billion – $175 million of which will be called in next week – are causing serious problems for the once-promising radio provider. As the company grasps at straws in an effort to avoid the filing, EchoStar mogul Charlie Ergen has kept his offer from last year on the table; an offer that would see Ergen gain control of the company after forking over several hundred million dollars into it. As much as we love Mel Karmazin, it could indeed be time for a changing of the guard as Ergen continues to push hard. On a related note, it appears Sirius XM may end up with the option to renegotiate or even terminate big contracts. It looks like remainder of Stern’s $6 gazillion contract will be among the first addressed which means he could finally get the out he’s been looking for. Come on, you know he’s been phoning it in for years. Oh well, he was gone in two years anyway.

Read

46 Comments

Circuit City woes continue, bankruptcy filing begins

By on November 10, 2008 at 9:57 AM.

Circuit City woes continue, bankruptcy filing begins

If the story of retail giant Circuit City was a book, Chapter 11 was a section it had certainly hoped would be skipped. Just one short week after news that the retail chain would be closing up shop in 155 of its locations, Circuit City has now announced that it will reorganize under Chapter 11 bankruptcy. Under the protection of Chapter 11, Circuit City should be able to continue paying salaries and providing benefits to its employees as well as honor all current customer programs including returns, exchanges and gift cards. A blurb from James A. Marcum, vice chairman and acting president:

We recently have taken intensive measures to overcome our deteriorating liquidity position. The decision to restructure the business through a Chapter 11 filing should provide us with the opportunity to strengthen our balance sheet, create a more efficient expense structure and ultimately position the company to compete more effectively. In the meantime, our stores remain fully operational, and our associates are focused on consistent and successful execution this holiday season and beyond.

The good news in all of this is that locations not affected by the aforementioned closures will remain open for business during the reorganization, provided the Bankruptcy Court grants Circuit City’s request to remain operational as expected. As the economic struggles in this country continue, we can only hope a Chapter 11 reorg will be successful in stabilizing the retailer’s business and might prevent further layoffs as Circuit City begins a long and difficult climb out of its horrible current financial situation.

Read

19 Comments

Vodafone cries out on behalf of the poor (and themselves we think)

By on September 3, 2008 at 5:18 AM.

Vodafone cries out on behalf of the poor (and themselves we think)

In a scathing response to European Commissioner Viviane Reding’s report on the mobile industry in Europe, Vodafone claims 40M million users, most of them “poor” pay as you go customers, may have to cancel their mobile service if her proposed changes to call termination charges go into effect. Termination charges are the fees mobile operators charge each other (and land line companies) for connecting to their networks. Currently mobile operators in Europe charge each other an average of 8 cents per minute. Reding proposes a reduction of these fees to 1 to 2 cents per minute. A reduction in fees is usually perceived as a good thing except these fees account for 15 to 20% of an operators revenue. That’s a good chunk of change for the mobile operators and the loss of that guaranteed revenue source has them, (well, at least Vodafone) shaking in their boots and spouting forth rhetoric.

Read

6 Comments