By Ed Oswald | Tuesday, February 17, 2009 at 7:13 am
Mel got his way, and kept EchoStar at bay (that unintentionally rhymed). Liberty Media, which owns and operates DirecTV, will invest $530 million in the troubled company in the form of several loans, including $250 million right away. That up front payment will help Sirius XM to pay off the $171.6 million of debt due today.
The rest of the funds would go towards funding the day to day operations of the company. The second phase of the loan would go to pay off debts owed by XM Radio, which has its own set of financial problems.
In return for the much needed infusion of cash, Libery Media would get seats on the board and enough stock to represent a 40% stake in the company. It also means that Karmazin has a much better chance of keeping his job.
“We are pleased to have come to this agreement with Liberty Media, particularly in light of today’s challenging credit markets. Liberty’s investment is an important validation of what SIRIUS XM has already achieved and a vote of confidence in what we will achieve,” he said in a statement announcing the deal.