No surprise here. The US-based international satellite radio company had been negotiating for months with holders of bridge notes that it was unable to repay. On Friday WorldSpace announced that it had filed a Chapter 11 petition for reorganization with the US Bankruptcy Court in Delaware. The company is now operating as a debtor-in-possession.
WorldSpace Inc., whose stock trades on Nasdaq as WRSP, announced Friday that it, along with its US subsidiaries WorldSpace Systems Corporation and AfriSpace Inc. have filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in Delaware.
“The WorldSpace Board of Directors unanimously determined that Chapter 11 reorganization was necessary for the Company to engage in an orderly process to raise sufficient funds to repay its senior secured and convertible notes by means of either a sale of the Company or its assets, or a recapitalization of the Company,” WorldSpace said in a statement.
“WorldSpace will continue to operate its business and manage its assets as a ”debtor-in-possession” under the jurisdiction of the court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the court. The holders of the Company’s existing senior secured and convertible notes have agreed to provide, subject to the satisfaction of certain conditions, a ‘debtor-in-possession’ financing facility of up to $13 million for a period of 90 days in order to facilitate a sale transaction. The financing facility is expected to enable the Company to continue to pay salaries of critical employees and continue operations which are critical to preserving the value of its core assets through the term of the facility,” the company said.