Washington - XM Satellite Radio has announced a definitive agreement for a set of financial arrangements totaling $450 million, which includes $200 million in new funds from strategic and financial investors and $250 million in payment deferrals and related credit facilities from General Motors.
XM also said it is on track to have more than 350,000 radios, retail and OEM, sold and ready for activation by the end of 2002.
The $200 million in new funding includes 10 percent Senior Secured Discount Convertible notes, due in 2009, and a small concurrent common stock sale. Proceeds will be used for general corporate purposes.
In the other major element of XM's financing package, GM has agreed to defer or finance up to $250 million in payments through 2006. The $250 million consists of the exchange of about $115 million in fixed payments through 2006, a $100 million credit facility due 2009 and the right to satisfy to $35 million of certain future payments obligations in stock rather than cash.
In addition to the financing package, XM started an exchange offer Dec. 24 for $325 million of its outstanding 14 percent Senior Secured Notes, due 2010, for new 14 percent Senior Secured Discount Notes due 2009, warrants and cash.
'With this financing package, we believe we have achieved full funding through cash flow breakeven,' said Hugh Panero, XM president/CEO. 'The financing also removes a major roadblock to our company being valued, based on its marketplace progress, business plan execution and future economic potential - all of which are exceptional,' he said.
All necessary conditions and approvals should be satisfied by the end of February.