WorldSpace obtains interim access to $6.5 million of DIP financing

By Jennifer Lanning Drey

Portland, Ore., Oct. 28 - WorldSpace, Inc. was granted interim court approval to access $6.5 million of its proposed $13 million debtor-in-possession financing, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The amount includes $2 million to which the company previously gained interim access through an emergency motion.

The final hearing is scheduled for Nov. 10.

As previously reported, WorldSpace said the funding will allow the company to meet payroll obligations to critical employees and begin a process to sell the company or its assets.

WorldSpace is negotiating the terms of up to $13 million in DIP financing from Citadel Structured Products, Inc., Highbridge International LLC, Oz Master Fund, Ltd. and AG Offshore Convertibles, Ltd. that is expected to give WorldSpace enough liquidity for 90 days in order to find a buyer for its assets.

The emergency DIP loan will mature in 90 days.

Interest will be Libor plus 1,200 basis points.

WorldSpace, based in Silver Spring, Md., has established an operational satellite-based digital radio system, commonly known as Digital Audio Radio Service, and is a licensed DARS provider. The company filed for bankruptcy on Oct. 17, and its Chapter 11 case number is 08-12412.

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