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Sirius XM Closes Liberty Deal

By Amy Gilroy -- TWICE, 3/6/2009

New York — Sirius XM Radio and Liberty Media today announced the closing of the second, final phase of Liberty’s $530 investment in Sirius XM, which relieves the satellite-radio company of all looming debt due this year, said Sirius XM.

Sirius XM CEO Mel Karmazin said, “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.”

Sirius XM had owed about $1 billion in maturing debt this year.

In February, Sirius XM and Liberty said upon completion of their deal, Liberty would receive a 40 percent stake in Sirius XM and two seats on the board expected to go to Liberty chairman John Malone and Liberty CEO Greg Maffei.

As part of the deal, XM, now a subsidiary of Sirius XM, extended its existing $350 million credit facilities and Liberty purchased $100 million of that debt from XM’s lenders. Liberty will also loan XM another $150 million.

It is still unclear how Liberty will leverage its stake in Sirius XM. Maffei recently

told

analysts he hopes Sirius and XM might combine to 150 channels in the future, freeing up half their combined spectrum for mobile video. But he noted this scenario is speculative. He also said DirecTV might bundle some of its services with a Sirius XM subscription in the future.

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  I would have loaned them $530 if that's all they needed. You may want to correct that.

  
  

  
  m s - 2009-9-3 14:50:00 EDT
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