Liberty to shelter Sirius from Echostar?

Sirius XM is weighing up a refinancing offer from Liberty Media ahead of today’s deadline to repay $175m in bonds to EchoStar which was using the debt’s leverage in an attempt to take over the US satellite radio company. Liberty Media is offering a senior secured loan that will allow the bonds to be redeemed.

The offer from Liberty, which could later involve strategic partnerships between Sirius and DirecTV, the top US satellite TV operator controlled by Liberty Media, is viewed as a more friendly offer and does not contemplate a takeover of the company while leaving Mel Karmazin as CEO of the company.

Sirius XM’s total debt now stands at about $3.25bn with $1bn due this year. Since rebuffing an unsolicited offer from Charlie Ergen’s EchoStar, Ergen has been buying Sirius debt. Sirius does not have enough cash to repay the $175m in bonds that are due today.

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