Sirius Satellite Radio reaches agreement on debt restructuring

New York, Oct. 17 - Sirius Satellite Radio said it has reached an agreement with holders of more than $1 billion of its debt and preferred stock on a recapitalization.

Under terms of the deal, Sirius' existing $700 million of debt and $525 million of preferred stock will be exchanged for common stock and the company will raise $200 million from the sale of new stock.

The New York satellite radio broadcaster said the restructuring will reduce its funding needs. The additional $200 million combined with $240 million of cash on hand is expected to be sufficient to fund the company into the second quarter of 2004 based on the current business plan.

Sirius Satellite Radio added that it is continuing to evaluate measure that would enable it to achieve cash flow breakeven without raising additional funds.

The additional equity investment will come from Oppenheimer global funds, which will put up $150 million, affiliates of Apollo Management, LP, which will invest $25 million, and The Blackstone Group LP, which will also invest $25 million.

Affiliates of Apollo Management and Blackstone will exchange their existing convertible preferred stock for shares of common stock and warrants to purchase common stock.

Assuming all debt and preferred stock is converted, once the recapitalization is completed current bondholders will own 62% of the common stock, preferred stockholders will own 8% and the three companies making the equity investment will own 22%. Existing stockholders will own 8% of the company. Current preferred stockholders will also receive warrants for 9.1% of the stock at an average strike price of "just under" $1.

UBS Warburg is advising Sirius Satellite Radio.

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