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Issue #45 |
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EADS Agrees to Buy the Remaining 25% of Astrium from BAE SystemsDeal for Globalstar Goes SouthSirius Offers Exchange of Equity for DebtXM Closes $475 Million Financing Package |
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EADS Agrees to Buy the Remaining 25% of Astrium from BAE SystemsEADS has agreed to pay EUR84m ($91M US) to BAE Systems for its 25% stake and gain complete control of Astrium. The group plans to bring a separate business producing Ariane space launchers into Astrium, creating a firm employing almost 10,000 in France, Germany, Spain and the UK. The sale has been expected for some time, but has been delayed by the declining value of BAE’s stake due to the deterioration of the commercial space market. Originally, the 25% stake was valued at EUR165 million. As part of the agreement, both firms will make matching investments of EUR84m in Astrium. Deal for Globalstar Goes SouthThe New Valley Corporation has abandoned plans to take control of Globalstar after failing to reach an agreement with Globalstar’s creditors. New Valley, an investment banking and real estate company, offered to invest $55 million in Globalstar, giving it a majority stake in the reorganized company with creditors owning the rest. Members of the creditors committee, which represents holders of Globalstar bonds, indicated that they planned to provide debtor-in-possession financing, a Globalstar spokesman, Mac Jeffery, said. Globalstar filed for bankruptcy protection last February after spending more than $4 billion to build its satellite telephone network. Globalstar’s creditors withdrew support for New Valley's proposed DIP financing and investment in Globalstar due to the Committee's anticipation of a favorable ruling on ATC, significant outstanding conditions and contingencies in the New Valley transaction, and the uncertainty of the value of the transaction. In addition, the Committee and Loral Space & Communications, Globalstar's controlling shareholder, were unable to reach agreement on critical conditions required by the New Valley transaction. As a result, the New Valley proposal appeared unlikely to be completed, while Globalstar would have been prevented from holding discussions with any other interested potential investor. Globalstar is in continuing discussions with potential investors and the company is confident another restructuring plan will be developed in the future. Members of the Globalstar Creditors Committee have already indicated that they intend to provide their own debtor-in-possession financing. Sirius Offers Exchange of Equity for DebtSIRIUS announced an offer to exchange shares of its common stock for all of its outstanding debt. Holders of approximately 79% in principal amount of SIRIUS' debt securities have already agreed to tender in the offer. Debt holders will receive 779.5 shares of common stock for each $1,000 of obligation (principal and accrued interest) exchanged. Completion of the exchange offer is conditioned upon, among other things, receipt of valid tenders from not less than 97% in aggregate principal amount of SIRIUS' outstanding debt. This minimum condition may be reduced with the consent of holders of SIRIUS' debt securities. Tendering holders will also consent to the adoption of certain amendments to the indentures under which SIRIUS' outstanding notes were issued to eliminate substantially all of the restrictive covenants. The exchange offer and consent solicitation will expire at 5:00 p.m., EST, on Tuesday, March 4, 2003, unless extended. The exchange offer and consent solicitation are elements of the company's previously announced recapitalization. As part of this recapitalization, SIRIUS will exchange shares of its common stock (and warrants to purchase common stock) for all of its outstanding preferred stock, and sell shares of common stock for $ 200 million in cash to affiliates of OppenheimerFunds, Inc., Apollo Management, L.P. and The Blackstone Group L.P. As a backup and concurrent with the exchange offer, the company is also soliciting votes to accept or reject a prepackaged plan of reorganization, which will attempt to accomplish the recapitalization on substantially the same terms as the out-of-court recapitalization. SIRIUS only expects to file this prepackaged plan if the minimum tender condition to its exchange offer is not satisfied or waived. Sirius claimed just under 30,000 subscribers going into 2003. XM Satellite Radio Closes $475 Million Financing PackageXM Satellite Radio, which counted more than 360,000 subscribers as of Jan. 8 and expects to exceed 1 million by the end of the year, closed on its $475 million funding package -- consisting of $225 million in new funds from strategic and financial investors and $250 million in payment deferrals and related credit facilities from General Motors. XM also closed its exchange offer with respect to its outstanding 14 percent Senior Secured Notes due 2010. XM had offered its noteholders a package of cash and new securities, including new 14 percent Senior Secured Discount Notes due 2009 and warrants to purchase common stock. Over $300 million, representing 92 percent of the outstanding issue of Existing Notes, were tendered. 25,514,960 warrants, exercisable at $3.18 per share, have been issued to noteholders. Bear, Stearns & Co., Merrill Lynch & Co. and Veronis Suhler Stevenson advised on the transactions. Hugh Panero, XM’s CEO, said "The completion of these financings and refinancings under today's difficult investment conditions is a critical milestone in XM's road to becoming a major entertainment company. The funding acquired, coupled with recent GM/Honda OEM announcements and the marketplace success of new XM receiver products in the retail marketplace, gives us a clear path to cashflow breakeven in 2004. Our management team and employees will continue their focus on executing each element of our business plan and delivering exciting, innovative services to our growing base of customers." The $225 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; affiliates of Columbia Capital LLC, AEA Investors Inc., Eastbourne Capital Management LLC, Everest Capital Management and BayStar Capital II, L.P.; and other parties. The Notes are convertible into common stock at a price of $3.18 per share. |
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