One of the nation’s two satellite radio service providers on Thursday fired back at what they say are false news reports about their financial condition.
Sirius Satellite Radio said in a written statement recent news articles that claim the company could be forced to seek bankruptcy protection if it could not raise new funds by the second quarter of 2003 are not accurate.
The statement that fueled reports by Reuters among others was taken from a Securities and Exchange Commission filing by Sirius that speculated what the company might do if its fund raising efforts were to fail. According to Sirius, this is “routine reporting language about what any company could be forced to do if it were unable to secure additional funds for operation."
"We have a tremendous amount of momentum in the marketplace," said Joseph P. Clayton, President and CEO of Sirius. "All of our radio, retailer and automobile manufacturing partners are very excited about our product and the wonderful acceptance it has received by consumers.
"We are making significant progress in solidifying our balance sheet, and I remain extremely confident that we will secure additional financing shortly."
Sirius says its quarterly report filed with the SEC contained language similar to that they have used in other SEC filings in the past to explain what could happen under certain circumstances.
“The Reuters story, and its provocative headline, gave the impression that there was a new and troubling development that had not been previously discussed. This is blatantly false. Sirius has previously disclosed what its cash reserves were, and that it would require additional funding," said the statement.
“According to conversations between Sirius and Reuters management, the news service claimed that their decision to print the misleading story was based on their assertion that Sirius had never used the word "bankruptcy" in previous filings, and this constituted new information. This too is blatantly false. Sirius has used this routine cautionary term in previous filings, such as in its Annual Report Form 10-K,” the Sirius statement said.
In a conference call with analysts and investors on Tuesday, Sirius says it once again indicated its funding requirements. They also say they stated they are seeking additional financing from existing partners, bondholders and other stakeholders, noting this is not unusual in any way for a company launching a new product in a new industry.
"We are in continuous discussions with our financial sponsors and all of our key debt holders," said John Scelfo, Executive Vice President and CFO of Sirius.
"While an agreement has not yet been reached, all of the parties are working toward the announcement of a transaction that will put our finances in top shape,” he said.
Sirius also disclosed that it had approximately $300 million cash on hand, enough to fund activities into the second quarter of 2003, and was looking for ways to extend those cash reserves further into the year through various cost cutting measures.
Sirius isn’t alone with it comes to financial concerns. Things have also been lean for competitor XM Satellite Radio. Both companies have seen massive drops from their one-time high stock prices.
According to Billboard magazine, there are concerns that power degradations with XM’s satellites could lead to them being replaced sooner than originally scheduled. The company also adopted a shareholders rights plan on August 2, Billboard reports, which helps prevents the company from being purchased too cheaply.
Both XM and Sirius have a long way to go to reach a 3 million subscriber base each, the point at which it’s estimated the companies will break even.
Sirius Satellite Radio said in a written statement recent news articles that claim the company could be forced to seek bankruptcy protection if it could not raise new funds by the second quarter of 2003 are not accurate.
The statement that fueled reports by Reuters among others was taken from a Securities and Exchange Commission filing by Sirius that speculated what the company might do if its fund raising efforts were to fail. According to Sirius, this is “routine reporting language about what any company could be forced to do if it were unable to secure additional funds for operation."
"We have a tremendous amount of momentum in the marketplace," said Joseph P. Clayton, President and CEO of Sirius. "All of our radio, retailer and automobile manufacturing partners are very excited about our product and the wonderful acceptance it has received by consumers.
"We are making significant progress in solidifying our balance sheet, and I remain extremely confident that we will secure additional financing shortly."
Sirius says its quarterly report filed with the SEC contained language similar to that they have used in other SEC filings in the past to explain what could happen under certain circumstances.
“The Reuters story, and its provocative headline, gave the impression that there was a new and troubling development that had not been previously discussed. This is blatantly false. Sirius has previously disclosed what its cash reserves were, and that it would require additional funding," said the statement.
“According to conversations between Sirius and Reuters management, the news service claimed that their decision to print the misleading story was based on their assertion that Sirius had never used the word "bankruptcy" in previous filings, and this constituted new information. This too is blatantly false. Sirius has used this routine cautionary term in previous filings, such as in its Annual Report Form 10-K,” the Sirius statement said.
In a conference call with analysts and investors on Tuesday, Sirius says it once again indicated its funding requirements. They also say they stated they are seeking additional financing from existing partners, bondholders and other stakeholders, noting this is not unusual in any way for a company launching a new product in a new industry.
"We are in continuous discussions with our financial sponsors and all of our key debt holders," said John Scelfo, Executive Vice President and CFO of Sirius.
"While an agreement has not yet been reached, all of the parties are working toward the announcement of a transaction that will put our finances in top shape,” he said.
Sirius also disclosed that it had approximately $300 million cash on hand, enough to fund activities into the second quarter of 2003, and was looking for ways to extend those cash reserves further into the year through various cost cutting measures.
Sirius isn’t alone with it comes to financial concerns. Things have also been lean for competitor XM Satellite Radio. Both companies have seen massive drops from their one-time high stock prices.
According to Billboard magazine, there are concerns that power degradations with XM’s satellites could lead to them being replaced sooner than originally scheduled. The company also adopted a shareholders rights plan on August 2, Billboard reports, which helps prevents the company from being purchased too cheaply.
Both XM and Sirius have a long way to go to reach a 3 million subscriber base each, the point at which it’s estimated the companies will break even.
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