Sirius, XM Take Next Step in Financial Plans

Sirius, XM Take Next Step in Financial Plans
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Satcasters Sirius and XM are making progress on their respective financial restructuring efforts.
The FCC approved Sirius' application to transfer control of its operating licenses in connection with its recapitalization. The license will be transferred to Sirius' creditors. The commission stated in its order that granting the request allows the satcaster to "access financial resources necessary to maintain and expand its service to the public"
As part of the financial restructuring, debt holders and stockholders hope to convert about $700 million of Sirius debt and about $225 million of preferred stock into common stock.
Sirius hopes to complete the recap this quarter.
XM said it received consents from an investor group and General Motors, which together are providing $450 million in new financial investment and support in conjunction with an exchange of debt due 2010, to reduce the minimum exchange offer participation threshold from 90 percent to 75 percent.
XM said it amended the exchange offer to reduce the minimum participation condition to 50.1 percent. The financing transactions are currently conditioned upon 75 percent participation by existing note holders in the exchange offer, and XM will close on the exchange offer only if the minimum participation condition to the financing transactions are satisfied or waived. This condition to the financing transactions can be amended only if both GM and 2/3 of the investors agree.

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