Sirius XM Prepares for Possible Bankruptcy
The New York Times said late today documents and analysis of a potential Chapter 11 filing are nearly complete, say people close to the company.
Sirius, whose radio personalities include shock jock Howard Stern, has struggled to refinance its debt load at a time when banks are skittish about lending. About $1 billion worth of debt comes due in 2009.
A bankruptcy could complicate matters for Charlie Ergen, chief executive of Dish Network Corp., who recently bought a major portion of a $300 million batch in Sirius debt that matures next Tuesday, the paper said.
Since then, speculation has arisen about whether Ergen would make a bid to buy Sirius. The possibility of a bankruptcy filing could force his hand to make an offer now in order to avoid the auction process in court. It also could put pressure on him to convert his debt into equity in the company at a higher price than he initially considered, the paper said.
Sirius has hired Alvarez & Marsal; Simpson, Thatcher & Bartlett; and Evercore Partners. Sirius declined to comment on the report, as did Alvarez & Marsal and Evercore Partners. Simpson, Thatcher & Bartlett didn't immediately return a call for comment.
Shares of Sirius close at 11 cents today.
