Malone (Liberty Media) Offers Bridge Loan To Sirius XM

DAB

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John Malone's Liberty Media is offering Sirius XM a bridge loan of several hundred million dollars to help the nearly insolvent satellite-radio company pay off debt that matures Tuesday, The Post has learned.

According to a source close to the situation, the loan is part of a two-step approach that Liberty wants to take as it looks to bail out Sirius XM, which is struggling to make its debt payment and fend off takeover maneuvers from EchoStar CEO Charlie Ergen.


As part of the plan, Liberty would provide Sirius XM CEO Mel Karmazin enough cash to repay $175 million in debt that Ergen currently holds and is due Tuesday.That then would give Liberty three months to come up with a plan to restructure Sirius XM's roughly $600 million in debt that comes due in May and in December.



One scenario could involve Liberty borrowing from Ergen's playbook by buying up Sirius XM debt on the open market. Another involves Liberty making a pitch directly to Sirius XM's bondholders.
 

DAB

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This is an interesting turn of events and certainly seems to be a solid effort to thwart any take over bid by Charlie Ergen.

It is good to see that we have these guys both wanting to buy and or at least put money up to help Sirius XM out of this financial crises.

Looks like Sat Radio isn't done yet boys! LOL
 

TSS Taylor

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I really wish they could make an official TV Drama out of the last week or two. And the story is continuing for quite some time. SIRIUS XM the E! True Hollywood Story.

I'm riveted with all the possibilities :smug:
 

HecticArt

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That's what I'm talking about! The vultures know there's a profit to be made w/ SXM. Even half in the bag I can see this will work out.
 

IdRatherBeSkiing

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I really wish they could make an official TV Drama out of the last week or two. And the story is continuing for quite some time. SIRIUS XM the E! True Hollywood Story.

I'm riveted with all the possibilities :smug:


Available only on DirectTV of course.
 

Supafly

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Oct 12, 2008
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No one really wants to takeover SiriusXM in it's current form. The amount of long term debt is overwhelming and could eventually bring down the aquiring company.

Really, both Echostar and Liberty Media would like to let the court wade through it all and manage the debt. But they're both to opportunistic to let it get out of their hands. I'd still be surprised it's not Chapter 11 Tuesday.
 

styckx

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Nov 11, 2008
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That's what I'm talking about! The vultures know there's a profit to be made w/ SXM. Even half in the bag I can see this will work out.

You're insane. Sirius is doomed, they are just prolonging it at this point.
 

James

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The debt is around 3.2 Billion due over the next four years much of which can be extended or converted. Annual sales is currently about 2.4 Billion. Sales should continue to increase to atleast 3.0-3.5 Billion before leveling off. At 3.5 Billion in sales Sirius XM will probably generate a Billion in free cash. At that rate they could pay off the debt in four years. That may be optimistic but realisically Sirius XM could be debt free in 5-7 years.
 

IdRatherBeSkiing

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Oct 11, 2008
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The debt is around 3.2 Billion due over the next four years much of which can be extended or converted. Annual sales is currently about 2.4 Billion. Sales should continue to increase to atleast 3.0-3.5 Billion before leveling off. At 3.5 Billion in sales Sirius XM will probably generate a Billion in free cash. At that rate they could pay off the debt in four years. That may be optimistic but realisically Sirius XM could be debt free in 5-7 years.

There is that little problem of expenses. I doubt they are clearing 2.4 billion.
 

James

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There is that little problem of expenses. I doubt they are clearing 2.4 billion.

Please reread my post. I said on 3.5 billion in sales they should generate about 1 billion in free cash flow, which is not necessarily profit (sales-expenses = profit), but they should also generate some profit.