Debt worries over for Sirius

Sirius closes Liberty deal, ending 2009 debt worries
Fri Mar 6, 2009 3:43pm EST


NEW YORK (Reuters) - Sirius XM Radio Inc (SIRI.O) on Friday completed the remainder of a $530 million capital infusion from John Malone's Liberty Media Corp (LINTA.O) that the satellite radio company said resolves its looming debt deadlines this year.

The deal solves the most pressing critical financial issue for the pay-radio service, which began 2009 with about $1 billion in debt due in the year. It still faces tough problems such as reining in costs and shrinking growth in subscribers.

"These transactions resolve all of the uncertainty surrounding the company's and its subsidiaries' debt maturing in 2009," Mel Karmazin, chief executive of Sirius XM, said in a statement. Shares of Sirius rose about 1 cent to about 14 cents.

Sirius, home to programs by personalities including Howard Stern and Oprah Winfrey as well as Major League Baseball, said Liberty purchased $100 million of credit facilities of Sirius's XM unit, and committed to loan an additional $150 million to XM to repay a portion of debt due in December.

The funds are part of up to $530 million in loans Liberty pledged to Sirius XM in exchange for a controlling 40 percent stake in the satellite radio operator. The move was seen as fending off a takeover attempt by Charles Ergen, whose satellite TV company EchoStar Corp had amassed debt in Sirius.



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