Home Music Industry News Sirius XM's deal with Liberty Media gives it an "out" – BloggingStocks

Sirius XM's deal with Liberty Media gives it an "out" – BloggingStocks

With Sirius , Inc. (: SIRI) shares hovering around 13 cents mid-morning, the pioneering and sole satellite company is probably savoring its investment this week by John Malone’s Liberty Media Corp. (NYSE: LINTA). Instead of filing for bankruptcy protection or possibly folding altogether, the satellite company stand s to gain a $530 million investment from Liberty while giving away a 40% stake in itself. For some reason, Liberty loves satellite. It already owns the majority of DirecTV. Now it wants a good chunk of Sirius . The 8K report filed by Sirius this week breaks the deal down like this: Sirius receives an instant $250 million term loan (at a whopping 15% less) in addition to $30 million of purchase money loans between the companies. The $250 disbursement was funded this past Wednesday. But wait, there is more. XM Radio is actually a subsidiary of parent Sirius Radio, and the part of the deal gives the XM contingent another $150 million term loan at 15% annually, with maturity occurring on May 1, 2011. This loan has not closed, and the provisions give a lease on in which to find more money outside of Liberty Media (good luck with that, board). If Sirius finds another buyer before the XM loan closes, it may have an out from Liberty. Are credit markets going to come around by mid-year to allow this to happen? Or, will some hard cash up instead from another ? For now, Sirius XM has found a way to escape eviction, but the land lord will come knocking again.

Sirius XM’s deal with Liberty Media gives it an “out” – BloggingStocks.