XM Satellite Radio announced in December a $450 million financing package that should see it through to a “cash-flow break-even” point, said Hugh Panero, XM’s president and CEO.
The financing consists of $200 million in new funds from investors and $250 million in payment deferrals and related credit facilities from General Motors, which is factory-installing XM radios in 25 2003 vehicle lines.
XM had projected activated subscribers to exceed 340,000 by the end of 2002.
“With this financing package, we believe we have achieved full funding through cash-flow break-even,” said Panero. “The financing also removes a major roadblock to our company being valued based on its marketplace progress, business plan execution and future economic potential – all of which are exceptional.”
XM’s competitor, Sirius Satellite Radio, announced a major refinancing in November. Both services have seen stock values plunge this year but forecast improvements as the hardware for their digital broadcasts of music and other programming penetrates the marketplace through retail sales and factory installations.
– Max Heine
