Despite pumping more than $21 million into the international satellite radio company as its debtor-in-possession lender, Liberty Media has decided to walk away from WorldSpace. It is unclear now whether WorldSpace has any alternative other than to simply shut down.
The announcement from WorldSpace:
“WorldSpace, Inc. (“WorldSpace”) announced today that strategic transaction negotiations with Liberty Satellite Radio, Inc. (“Liberty”), its debtor-in-possession lender, have been terminated by Liberty. WorldSpace is awaiting information from Liberty as to its expectations as WorldSpace’s secured lender with respect to the handling of Liberty’s collateral. In the interim, WorldSpace is planning for a potential de-commissioning of its satellites and reviewing its strategic alternatives in light of the termination of negotiations.”
While the future of the international satellite radio company is in doubt, US Bankruptcy Judge Peter Walsh on Tuesday extended until April 17th the exclusive right for WorldSpace to submit a reorganization plan for it to emerge from Chapter 11.
RBR-TVBR observation: Two attempts to restructure the finances of WorldSpace and bring it out of Chapter 11 have fallen by the wayside. It certainly appeared that Liberty Media – which is also the largest equity holder of Sirius XM – was the last hope WorldSpace had of being able to survive. But now we wait to see if any other would-be rescuer pops up.