Satellite radio broadcaster Sirius Satellite Radio, which warned yesterday it may have to seek bankruptcy protection if it cannot raise new funds, has signed BMW North America as its latest OEM customer.
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Sirius is expected to be widely available, beginning in the fourth quarter of 2002, as a dealer-installed option from BMW and MINI dealerships in the US.
According to Reuters, Sirius told the Securities and Exchange Commission that it needed as much as $US600 million to continue operations and had hired financial advisers for help on ways to obtain new funds, including a possible debt-for equity swap that would dilute current shareholder stakes.
According to Reuters, Sirius also reported a second quarter net loss of $US124.6 million, or $1.62 a share, compared with a net loss of $72.5 million, or $1.35 per share, last year.
“If we fail to timely raise additional funds, we will be forced to seek protection under the United States bankruptcy code, materially reduce our operations, significantly alter our business plan and/or seek the sale of our company,” Sirius said in the filing, according to Reuters.
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By GlobalData
“This in no way indicates that a bankruptcy filing for Sirius is imminent,” the company said in a statement sent to Reuters following a report of the SEC filing.
“Sirius currently has approximately $300 million in cash on hand, which is enough to operate the company into the second quarter of 2003, as previously announced,” the statement sent to Reuters added.
According to Reuters, Sirius has in the past said repeatedly that it needed to raise additional capital in 2003 to remain in operation and has said in past SEC filings that it would be unable to continue its service if it did not raise those funds.
Reuters said the company on Tuesday claimed it had 6,510 subscribers as of last Sunday and six weeks after its nationwide launch, up from 3,347 subscribers at the end of the second quarter.
Sirius’ only competitor, XM Satellite Radio Holdings, had its national launch last November and reported almost 137,000 subscribers by the end of June, Reuters added.
Both companies offer mostly commercial-free radio stations broadcast nationwide via satellite for a monthly subscription fee. A compatible radio receiver is required but these are increasingly available either as dealer-fitted options at major brand showrooms or on the aftermarket.
