EVERYDAY I SEE POSTINGS HERE BY BOILERROOM PUMPERS TRYING TO PUMP THEIR LATEST PENNYSTOCK. I WONDER WHAT IT IS ABOUT THIS BOARD THAT MAKES THEM THINK THEY'LL FIND TAKERS HERE? IS IT BECAUSE THEY FIGURE IF YOU'RE WILLING TO PAY FOR RADIO WHICH IS FREE AND PAY $8-9/SHARE FOR A COMPANY THAT NEARLY WENT BANKRUPT AND JUST LOST $450 MILLION, THEN YOU'LL PROBABLY BUY ANYTHING? IS THAT IT?
Tuesday, January 14, 2003
Sirius says it may face bankruptcy if financing fails
By David Evans / Bloomberg News
NEW YORK -- Sirius Satellite Radio Inc. said it may be forced to file for bankruptcy protection if the company, which offers more than 100 radio channels that can be heard across the U.S., can't complete a refinancing by June.
The company said its cash fell 28 percent to $180 million in the fourth quarter in a filing today with the Securities and Exchange Commission. The filing included the text of a proposed Chapter 11 bankruptcy petition. Sirius said it hired Stutman, Treister & Glatt, a Los Angeles bankruptcy law firm Angeles to prepare the document.
Sirius first proposed a refinancing plan on Oct. 17, asking shareholders to agree to have their ownership diluted from 83 percent to 8 percent. It asked bondholders to swap their debt for equity in the company. Sirius said that refinancing, including a $200 million stock sale, would fund operations through the second quarter of 2004.
"If we are not able to complete the restructuring or obtain additional financing in a timely manner, we may be forced to declare bankruptcy," said Sirius in the SEC filing.
Company spokesman Jim Collins said Sirius first disclosed in an Oct. 17 conference call that it might file for bankruptcy if its refinancing plan failed. "This filing was a response to questions the SEC had about a previous filing," Collins said.
Company executives, including Joe Clayton, chief executive and John Scelfo, chief financial officer, didn't return telephone calls seeking comment. Frank Merola, a bankruptcy lawyer representing Sirius, declined comment.
Sirius said it had 29,947 subscribers on Dec. 31, compared with 346,000 customers reported by competitor XM Satellite Radio Holdings Inc. A year ago, Clayton projected the company would have at least 150,000 subscribers by the end of 2002. Sirius shares fell 2 cents to 79 cents in trading on the Nasdaq National Market at 3:59 p.m. New York time.
Sirius says it wants its bondholders and other lenders to exchange $700 million of debt for 62 percent ownership of the company's stock. Holders of $525 million of preferred stock have been asked to swap their shares for 8 percent of the company.
The refinancing plan also calls for Oppenheimer Global Funds to invest $150 million, for 17 percent of the company, at 92 cents a share. Apollo Management LP and The Blackstone Group LP would each invest $25 million, at $1.04 a share, for 2.5 percent ownership, under the proposed plan. The $200 million new investment may be terminated if investors don't approve the plan, if the company experiences a "material adverse change" or if Sirius files for bankruptcy protection, Sirius said in the SEC filings.
Sirius charges $12.95-a-month for 60 commercial-free music channels and 40 news, sports and entertainment channels that carry ads.