Sirius in “serious” trouble

Earlier this month, it was discovered that Sirius XM Radio was considering filing for bankruptcy, as it expects a $600 million debt to banks alone by the end of the year. Sirius had entered talks with EchoStar to avoid a takeover by the company. Echostar, according to the Wall Street Journal, holds about $400 million of the satellite-radio company’s debt.

EchoStar Chairman and Chief Executive Charles Ergen, who is believed to be seeking control of Sirius, has been accumulating Sirius debt since late summer, the people said. EchoStar holds most of the $175 million in Sirius debt expiring in February and owns more than half of a $400 million tranche coming due in December. Both stakes were purchased from hedge funds. Sirius’s total debt load is $3.25 billion. Sirius didn’t respond to a request for comment.

Sirius had already rejected an offer from EchoStar’s owner to assist with the debt payments. However, the offer remains on the table. If Sirius can’t come up with $175 million  by Feb. 17, if might forced to file bankruptcy, giving EchoStar the path to take over.

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