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Sirius to Get Cash Infusion

Sirius to Get Cash Infusion

Sirius Satellite Radio is going to be re-capitalized in the amount of $1.2 billion. The satcaster struck a deal with holders of more than $1 billion of its debt and preferred stock, to convert substantially all of its approximately $700 million of debt and all of its $525 million of preferred stock into common stock, and raise $200 million from the sale of newly-issued stock.
Sirius said last week it was seeking such a re-capitalization deal, after confirming it missed an interest payment worth approximately $720,000 on its 83/4% Convertible Subordinated Notes due 2009 – that were “technically” due Sept. 30. Sirius said the missed payment would not have placed the company in default until the end of this month.
Sirius said the additional $200 million, combined with the approximately $240 million
cash currently on-hand, is expected to give the company cash to operate into Q2 2004.
The new cash infusion will be provided by Oppenheimer global funds ($150 million) and affiliates of Apollo Management, L.P. ($25 million) and The Blackstone Group L.P. ($25 million).
The deal is subject to approval by stockholders and regulators.
“When completed, this transaction will give Sirius the strongest balance sheet in our industry and, more importantly, allow us to focus 100% of our energies on our business partners and acquiring subscribers for our premier entertainment service,” said Sirius President/CEO Joe Clayton.