WorldSpace files BK...
WRSP files BK. Does SIRIUS/XM have any stake in this company? I thought they provided some programming to them...
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:
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?
"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."
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.
Originally Posted by Demian
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.
Wasn't Worldspace broadcasting some of XM's content? I am curious what kind of deal they worked out in regards to this...
I don't think sure, but am not 100% sure... I'd say 75% sure.
Originally Posted by Demian
Worldspace was up 22% today after announcing Bankruptcy......