updated 12:20 pm EST, Fri February 13, 2009
Sirius XM Debt Exchange
Sirius XM on Friday took emergency steps to save itself by starting a debt exchange. The company says it has started a deal that will swap about $172.5 million of the convertible senior notes keeping the company afloat for equivalents that will expire at the start of June 2011. The exchange would give the company about 1.5 years of extra time to pay the portion of the debt, which would otherwise have come due in December this year.
Offloading the debt potentially gives Sirius extra breathing room to improve its business and pay off its increasingly large balance on its own terms. The company is believed to have as much as $925 million in total debt owed this year
Sirius XM still cautions that its approach may not necessarily save the company. The firm may declare bankruptcy as early as February 17th if deals with "others" to refinance its debt don't go through; the outsiders aren't mentioned but are believed to center on satellite TV company EchoStar, which may have bought up $300 million in debt and has been pondering acquiring more.
Additional reports have circulated that the radio network has been talking to via Orbitcast]