Without fast loans, Sirius faced bankruptcy
Sirius was in desperate need of cash to pay back $172 million in convertible notes, due Tuesday. Liberty Media, DirectTV’s parent company, has agreed to give Sirius $530 million in loans.
Fast loans, long-term loans
Liberty gave Sirius $250 million in fast loans Tuesday, and another $30 million will go to the company soon. Sirius must pay back the $280 million by the end of 2012 at an interest rate of 15 percent.
The rest of the money will be spread out in other loans. Liberty will lend $150 million to Sirius subsidiary XM satellite radio. It will also pay off $100 million of Sirius XM’s existing loans. Liberty’s loans mean Sirius will continue to provice satellite radio service for three years.
A mountain of debt
Including the $172 million that was due Tuesday, Sirius was facing debt of nearly $1 billion. Now, with the new loans from Liberty, Siruis’ outstanding debt will surpass $1 billion. Sirius still has t $750 billion in loans due this year.
The $100 million for paying off debts from Liberty will go toward that, but Sirius will need a lot more cash to pay off the rest of its debts and stay in business.
In return for Liberty’s $530 million in loans, Liberty Media will now own 40 perent of Sirius XM. Liberty will buy 12.5 million shares of Sirius preferred stock. The stock is convertible into 40 percent of the general SIRI stock. ... click here to read the rest of the article titled "Fast Loans from Liberty Keep Sirius on the Air"