WorldSpace files BK...

WRSP files BK. Does SIRIUS/XM have any stake in this company? I thought they provided some programming to them...

http://biz.yahoo.com/bw/081017/20081017005761.html?.v=1


Press Release Source: WorldSpace, Inc.

WorldSpace, Inc. Voluntarily Files for Bankruptcy Protection
Friday October 17, 3:02 pm ET

SILVER SPRING, Md.--(BUSINESS WIRE)--WorldSpace, Inc. (NASDAQ:WRSP - News) a leading provider of satellite radio services outside the U.S., today announced it, along with its U.S. subsidiaries WorldSpace Systems Corporation and AfriSpace, Inc. have filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in Delaware.

The WorldSpace Board of Directors unanimously determined that Chapter 11 reorganization was necessary for the Company to engage in an orderly process to raise sufficient funds to repay its senior secured and convertible notes by means of either a sale of the Company or its assets, or a recapitalization of the Company.

WorldSpace will continue to operate its business and manage its assets as a ”debtor-in-possession” under the jurisdiction of the court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the court. The holders of the Company’s existing senior secured and convertible notes have agreed to provide, subject to the satisfaction of certain conditions, a “debtor-in-possession” financing facility of up to $13 million for a period of 90 days in order to facilitate a sale transaction. The financing facility is expected to enable the Company to continue to pay salaries of critical employees and continue operations which are critical to preserving the value of its core assets through the term of the facility.

Now just substitute "Sirius XM" for "Worldspace" and we have ourselves a little glimpse into the future.

Maybe Mel wants all those new shares so he can buy them.

that would be 1.4 billion dollars

From worldspace faq:
http://www.1worldspace.com/corporate/faq/

Is 1worldspace Satellite Radio service available in the United States?

No, But 1worldspace provides four of the original content channel programming on XM Satellite Radio, America's most successful Satellite Radio company. 1worldspace was a founding shareholder of XM, and the 1worldspace proprietary and patented technology is used in each XM receiver. The 1worldspace Satellite Radio Service is available in Asia, Africa, Middle East, and parts of Europe.

I also found this...does XM still have all those shares? Do they lose money in this Worldspace BK?

http://www.worldspace.com/press/09_07_2005.html

"WorldSpace had total cash and cash equivalents of $83.3 million as of June 30, 2005.

Since then, WorldSpace has raised an additional net amount of approximately $244 million through an Initial Public Offering (IPO) and an investment by XM Satellite Radio Holdings, Inc. (XM). On August 9, 2005, WorldSpace completed its initial public offering of its Class A Common Stock of 11.5 million shares, raising a total of approximately $222 million in net proceeds for WorldSpace. On July 18, 2005, WorldSpace issued to XM 1,562,500 shares of Class A Common Stock for an aggregate purchase price of $25 million. In connection with this transaction, WorldSpace entered into a global satellite radio cooperation agreement with XM pursuant to which the companies agreed to cooperate on receiver technology, terrestrial repeater technology, original equipment manufacturer (OEM) and third-party distribution relationships, content opportunities and new applications and services. In addition, Gary Parsons, the Chairman of the board of directors of XM, was elected to the WorldSpace board of directors. In connection with this transaction, WorldSpace also granted to XM a performance-based warrant to purchase 1,785,714 shares of Class A Common Stock."

Quote:

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Originally Posted by Demian

I also found this...does XM still have all those shares? Do they lose money in this Worldspace BK?

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XM holds approximately 1.5 million shares still, however XM had been writing it down quite a bit. I think the value of it was less than $3 million on XM's books.

XM purchased the shares (and got some warrants too) in a complex deal when WRSP did their IPO. In exchange for XM buying in to the IPO... WRSP gave up their rights to 4 music channels worth of bandwidth that WRSP was entitled to... as well as rights to royalties that WRSP had in XM. These items go back to the early days of Mobile Satellite Radio, when WRSP owned big portions of XM -- when they sold out, they retained the rights to a portion of XM bandwidth and royalty payments, since XM used their repeater technology.

While many shot down XM's $20 million investment in WRSP, what they don't understand is that this $20 million was really a buyout that XM was making -- buying out WRSP's rights to a large chunk of bandwidth, as well as their rights to royalties. It may not have made sense at the time -- but now, it should make a lot of sense in the grand scheme of things. XM really needs that bandwith and lowered royalties.



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Wasn't Worldspace broadcasting some of XM's content? I am curious what kind of deal they worked out in regards to this...

Quote:

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Originally Posted by Demian

Wasn't Worldspace broadcasting some of XM's content? I am curious what kind of deal they worked out in regards to this...

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I don't think sure, but am not 100% sure... I'd say 75% sure.

Worldspace was up 22% today after announcing Bankruptcy......

WTF?

WRSP up again today after announcing bankruptcy......that's over 30% up in two days!

http://rapidtvnews.com/index.php/200...11-latest.html

Worldspace Chapter 11: latest
Chris Forrester , on 21-10-2008

Sources at bankrupt Worldspace's Washington HQ say that virtually all the programming and content staff have now been dismissed, with a source stating that the dismissed personnel have not been paid salaries owed to them (which may be remedied once Worldspace can access funds). The same process is well advanced in India where staff have been let go.

It seems the company is now wholly concerned in selling off assets, of which more in a moment. The most telling comment comes from one observer, who requested anonymity, but asked ìhow such a gossamer-thin business model ever got SEC approval for a public offering in the first place.

Meanwhile, Benoit Chereau is CEO at Worldspace Europe, and has spent the past few days in urgent discussions with various advisors and consultants as to the state of his European business following on from the parent companyís Chapter 11 declaration on Oct 17. While Worldspaceís Washington staffers are owed $1.35m in back-pay and related obligations, its handful of French employees have the protection of French labour laws to help them through any similar challenge.

Unfortunately, M Chereau is forbidden to speak with the press and so the precise position of Worldspaceís non-USA investments remain somewhat clouded in mystery. It remains unclear as to whether Worldspaceís European subsidiaries remain free to do business, or whether their European assets ñ such as they are ñ are also bound up in the US restructuring, or remain pledged or mortgaged to Worldspaceís creditors.

Worldspace in Washington is borrowing another $13m in order to help pay day-to-day bills over the next 90 days while it seeks a buyer for its assets. Worldspaceís declared assets total $307.4m, and its liabilities a massive $2.12bn. The broadcaster had 163,000 subscribers, mostly in India, as at Dec 31st last year, generating a trifling $3.4m per half-year in subs income.

Those assets include a pair of satellites, and a third (which Worldspace described as completed and currently in storage) which, with their related systems, it recently valued at a total of $272m. It has no other notable assets other than ìproperty and equipmentî which it values at $13m. However, as CFO Sridhar Ganesan told us on July 27, All the assets of the Company, including the AfriStar satellite and interest in the spectrum rights, are already pledged to the lenders. There has been no substantive change in the security provided to them and there will be no impact on the ongoing operations in Europe as well as in Italy because of the pledging of these shares.

While it has many pressing debts, it also has a growing list of creditors, including an annual set of occupational leases that costs some $4m to fund. The leases are ìnon cancellableî and run to 2016, and thus have an obligation attached to them of $27.8m.

Worldspace also has an obligation to buy 722,445 satellite radio chipsets for a sum of $18.2m, due to be paid on June 30 2008. It is now in default on that debt. Back in December 2004 it also restructured a massive $1.55 billion-worth of notes payable and cash advances into a Royalty Arrangement, and which saw Worldspace enter into an obligation to pay 10% of all earnings (pre-EBITDA) until 2015.

Meanwhile, the Class Actions mounted against Worldspace, founder, president & CEO Noah Samara and other company officials continue. The Actions started following Worldspaceís IPO, and allege violations of the US Securities Act, and that subscriber numbers were allegedly overstated.

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