Sirius XM (NASDAQ: SIRI) is up against debt payments that its management has been saying would not be a problem.
According to The Wall Street Journal, "Sirius XM Satellite Radio Inc. is facing an important test of its viability this month: how it handles $174.6 million in debt coming due Feb. 17." Since the company has not reported its fourth quarter, no one knows for certain how much cash Sirius has. More debt payments are due later in the year.
Could the debt problem this month push Sirius into Chapter 11? It is impossible to tell, but the obligation has not been renegotiated or replaced with new debt.
Sirius may be best off in Chapter 11, given its huge debt load. Without that anchor it could operate more freely. The company's core business may be attractive enough to attract debtor-in-possession financing to get Sirius through the process.
At $0.12 a share, Sirius already trades like it is bankrupt. It ought to look at the airline industry and see how well Chapter 11 can work.
No comments:
Post a Comment