Tuesday, February 10, 2009

Sirius XM Preparing For Bankruptcy

ARS is all over the latest gossip on satellite radio company Sirius XM. Turns out the provider of paid commercial-free radio for cars, is working with Lehman liquidator Alvarez & Marsal and Simpson Thacher & Bartlett, in preparation for a Chapter 11 filing. According to Sorkin: "The documents and analysis are close to being completed and a filing could come within days." Bill Repko is also about to make off like a bandit, as his restructuring group at Evercore is allegedly also all over this one.

The recent trending of car sales (which would hit negative SAAR if that was at all possible), has been destroying the top and bottom lines at Sirius XM, which is reliant on new cars to be sold with its equipment, so the company can peddle its expensive monthly service to new drivers.

A filing would be a bad blow to EchoStar which owns a lot of SIRI's debt, and with recent prices of DISH in the mid 90s, these have much more space to drop compared to Sirius' 13 of 13 issued in August of last year and which were last trading at 25 per Trace. Sphere: Related Content
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