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XM Radio Announces $450 Million Financing Package

Discussion in 'Sirius XM General Discussion' started by John Corn, Dec 23, 2002.

  1. John Corn

    John Corn Hall Of Fame

    Mar 21, 2002
    This is GREAT news for XM and XM subs!! I think this move really solidifies XM's future :righton:

    WASHINGTON, Dec. 23 /PRNewswire-FirstCall/ -- XM Satellite Radio Inc. today announced a set of definitive financing agreements totaling $450 million -- consisting of $200 million in new funds from strategic and financial investors and $250 million in payment deferrals and related credit facilities from General Motors.

    The $200 million in new funding is in the form of 10% Senior Secured Discount Convertible Notes due in 2009 and a small concurrent common stock sale. Purchasers of the Notes include American Honda Motor Co., Inc., Hughes Electronics Corporation, The Hearst Corporation, Columbia Capital LLC, AEA Investors Inc., Eastbourne Capital Management LLC, BayStar Capital II, L.P., and other parties. The Notes are convertible into common stock at a price of $3.18 per share. Proceeds will be used for general corporate purposes.

    In the other major element of the financing package, General Motors, which is currently factory-installing XM radios in 25 different 2003 vehicle lines, has agreed to defer or finance up to $250 million of payments through 2006. The $250 million financing consists of (i) the exchange of approximately $115 million in fixed payments due to GM through 2006 for $89 million of 10% Senior Secured Convertible Notes due 2009, (ii) a $100 million Credit Facility due 2009 with an annual interest rate of 6 month LIBOR plus 10 percent to be used only for payments to GM, and (iii) the right to satisfy up to $35 million of certain future payment obligations to GM in stock (at then current market value) rather than cash. In connection with the $100 million Credit Facility, GM will receive 10 million common stock warrants at $3.18 per share. The conversion price for the GM Notes varies from $5.00 to $20.00 per share, depending upon the future price of XM stock.

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  2. George_F

    George_F Legend

    Dec 25, 2002
    Your right John, this really does solidify XM's future!!

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