Sirius Satellite Radio Inc. Thursday announced a recapitalization of $1.2
billion, with stock offerings intended to add $200 million in new capital,
eliminate $700 million in debt and convert $525 million in preferred stock into
common stock. The deal will be completed by Oppenheimer Global Funds, affiliates
of Apollo Management and the Blackstone Group.
The stock exchange -- which will dilute the value of Sirius common stock by
8 percent -- will give the company enough cash to operate through the second
quarter of 2004, Sirius said.
So far, Sirius has signed up 14,000 subscribers -- fewer than expected -- but the
company attributed the number to a soft retail marketplace.
Sirius expects to sign up 400,000 subscribers by the end of 2003 after one year
of selling satellite radio into new and leased cars, such as models offered by DaimlerChrysler,
Nissan North America Inc. and BMW of North America LLC.
Sirius stock closed the day at $1.32 apiece -- up 48 cents but still much lower than
its year-to-date high of $13.05.