Liberty Media To Offer $250M Loan To 'Rescue' Sirius XM
This story was written by David Kaplan.
Liberty Media (NSDQ: LINTA) will offer Sirius XM a $250 million secured loan designed to "rescue" the company from the advances of Echostar (NSDQ: SATS) CEO Charlie Ergen, FT reported. The EchoStar head has been attempting to win control of Sirius in recent weeks by purchasing the troubled satellite radio provider's distressed debt while at the same time offering to invest cash in the business.
Liberty's offer is intended to block Ergin from controlling Sirius (NSDQ: SIRI). The loan is considered the first part of a "multi-stage" deal help Sirius meet a fast-approaching debt payment, FT said, citing unidentified sources. The Liberty/Sirius deal involves a debt for equity swap and would leave Liberty Chairman John Malone's group, which controls EchoStar's larger rival DirecTV (NYSE: DTV), with an otherwise unspecified stake in Sirius. The other stages of the deal weren't clear. The moves follow Sirius' warning that it would file for bankruptcy protection if it couldn't restructure its debt by this Tuesday. In all, Sirius has $3.25 billion in outstanding debt; $1 billion of that is due this year.
Much more on the saga at our Sirius channel
By David Kaplan