Liberty Media said Friday that it has closed the final phase of its investment in troubled satellite radio company Sirius XM Radio.
As part of the deal announced last month, Liberty had agreed to invest about $530 million in Sirius in return for a 40% interest in the company. According to the company, the second phase of that transaction - involving an additional $150 million loan to XM Satellite Radio, Sirius XM's wholly-owned subsidiary and Liberty's purchase of up to $100 million of the loans outstanding under XM Satellite Radio's existing credit facilities - was completed March 6. The first phase - consisting of a $280 million loan from Liberty to help Sirius pay off existing notes and for working capital, was completed earlier.
Upon closing of the second phase, Sirius issued 12.5 million preferred shares convertible in to 40% of Sirius common stock to Liberty.
Liberty had been embroiled in a brief battle with Dish Network chairman Charlie Ergen over Sirius. Ergen, through his companies, had purchased Sirius debt and had made a $500 million offer for control of the satellite radio giant. That offer was rebuffed.
After the deal was announced, Liberty CEO Greg Maffei hinted that the radio service could be bundled in the future with its satellite TV business, DirecTV.
"This closing allows Liberty to align itself with one of the most exciting companies in media today," Maffei said in a statement Friday.
Sirius XM also announced that XM Satellite Radio, its wholly owned subsidiary, amended and extended its existing $350 million credit facilities. XM Satellite Radio's existing term loan and revolving loan have been rolled into a single term loan facility.
J.P. Morgan Securities acted as financial advisor to Sirius XM in connection with the transactions. UBS and Lazard Freres & Co. LLC acted as financial advisor to Liberty.
In a prepared statement, Sirius CEO Mel Karmazin said the closing of the deal "is an example of the confidence our lenders and Liberty have in our business model. These transactions resolve all of the uncertainty surrounding the company's and its subsidiaries' debt maturing in 2009. Having addressed our near-term financial obligations, we remain focused on continuing to deliver on all the promise of the merger of Sirius and XM - a more efficient company offering the best programming through new packages to more subscribers."
Sirius stock was flat at 13 cents per share in afternoon trading March 6.
Weekly digest of streaming and OTT industry news
Thank you for signing up to Multichannel News. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.