Tech & Biz

Sirius XM Reaches Deal With Liberty Media

by Jordan Yerman | February 17, 2009 at 09:46 am

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Sirius XM, facing bankruptcy, has reached a deal with Liberty Media, which will stave off an impending bankruptcy filing.

The gist of the multi-stage deal is a stock-for-loan trade which will extend a lifeline to the embattled satellite radio in exchange for handing Liberty 40% of Sirius XM stock, as well as a spot at the boardroom table.

The last-minute deal parries an aggressive move by EchoStar, which owns the Dish Network and had been buying Sirius’s debt in hopes of taking control of the company if it defaulted. It calls for a total of $530 million in loans from Liberty Media, the media group controlled by John Malone, which will get preferred stock convertible into 40 percent of Sirius’s common equity, the companies said in a press release Tuesday.

Mr. Malone, who is Liberty’s chairman, and Greg Maffei, Liberty’s president and chief executive, are expected to join Sirius’s board as part of the deal.