Sirius XM Holders Get To Live Longer (SIRI, LINTA, LINTB, LCAPA, LCAPB, LMDIA)

Sirius XM Radio Inc. (NASDAQ: SIRI) and Liberty Media Corporation (NASDAQ: LINTA, LINTB, LCAPA, LCAPB, LMDIA) have announced the closing of the second and final phase of the John Malone rescue package.

Under terms of the deal,  Malone’s Liberty will invest in Sirius XM.  The satellite radio provider and its lenders have also agreed to extend its outstanding loans which are due in May.

These transactions “should” resolve resolve the uncertainty over the company’s and its subsidiaries’ debt that is maturing in 2009.  The company says this DOES resolve it, but we argue it SHOULD resolve it.

Sirius XM also announced that the term loan and revolving loan for  XM Satellite Radio, a subsidiary of Sirius XM,  been rolled into a single term-loan facility of $350 million.

Liberty will loan $150 million to XM Satellite Radio to repay a portion of the  10% convertible notes due December 1 issued by its former corporate parent.  Sirius XM has granted Liberty 12.5 million shares of new preferred stock convertible into 40% of the common stock of Sirius XM.

Saying a $0.13 or $0.14 stock was “allowed to live” is a misnomer.  This company is living on life support and may be in a coma.  There are still many issues ahead for Sirius XM, and the shaky economy and plummeting auto sales  is just a small piece of the pie.

Sirius XM shares are up more than 6% today to $0.1384.

Jon C. Ogg
March 6, 2009