When John Malone’s Liberty Media decided to cut its losses and walk away from funding WorldSpace in its Chapter 11 reorganization it looked like the international satellite radio company would have to shut down. But a last minute deal has saved it – and the savior is a familiar name.
WorldSpace founder and former CEO Noah Samara had tried once before to buy the company out of bankruptcy, but his Yenura Pte. Ltd. failed to put together financing for its $28 million bid. Now, though, Samara has a new company, Yazmi USA LLC, which came back with a $5.5 million bid after Malone’s exit, and actually closed the deal last week.
So, WorldSpace is reorganized and has exited Chapter 11. What remains to be seen now is how well funded Samara is to keep the company operating and try to get it to profitability – something it had never achieved. The hurdle actually got higher while the company was in Chapter 11, since WorldSpace had to shut down its fast-growing business in India last December. Because the company was in bankruptcy, it was not able to offer refunds to shortchanged Indian subscribers, which no doubt left a negative impression.
RBR-TVBR observation: We’ve said repeatedly over the years what a great guy Noah Samara is. He had an ambitious vision of how to deliver radio on a global scale – but as much as we like him, we don’t see how this is going to become a viable business.