Facing a likely bankruptcy, Sirius XM Radio Inc. found a savior in Liberty Media Corp., which will lend $530 million to the satellite radio provider and block a bid for control that had been waged by a rival both companies share: Dish Network Corp. CEO Charlie Ergen.
Sirius had warned it could file for bankruptcy as early as Tuesday if it could not successfully negotiate with its debt holders. Sirius XM Radio has 20 million subscribers who use the service to listen to sports, music and talk, including Howard Stern’s show.
The company found itself on the brink as credit markets dried up and auto sales plunged – a critical factor for Sirius because many new subscribers buy the service in package offers with cars and trucks.
The crisis brought Sirius chief executive Mel Karmazin into a standoff with Ergen, who bought up much of the debt that was coming due Tuesday and offered capital infusions and a loan restructuring in return for control of the company.
That would likely have meant Karmazin’s ouster, but he appears to have found an alternative – in Liberty Chairman John Malone – in time to stave off a Chapter 11 filing.
Starbucks brews up instant coffee plans
Starbucks Corp. began selling its new instant coffee online Tuesday, ahead of a nationwide launch to coincide with the company’s first major ad campaign.
Customers will be able to buy packets of the new coffee in Starbucks’ Seattle and Chicago stores March 3 and the rest of the company’s U.S. stores in the fall when the advertising begins. Online orders will start shipping in March.
Chief Executive Howard Schultz said the gourmet coffee chain wants to change perceptions of both its own affordability and the quality of instant coffee. “This is not your mother’s instant coffee,” Schultz said at an “unveiling” event in New York.
Called Via, the water-soluble product sells in packets of three for $2.95 or 12 for $9.95 – $1 or less per cup. Just Colombia and Italian Roast varieties will be available at first, but the company will add others later.
Businessman charged with ‘massive’ fraud
Federal authorities Tuesday charged a prominent Texas businessman and three of his companies with carrying out a “massive, ongoing fraud” involving the sale of $8 billion in certificates of deposit, one of the largest alleged financial frauds in U.S. history.
R. Allen Stanford and two colleagues, working through a web of firms in Houston and the Caribbean, lied to customers about how their money was being invested and how the firms’ investment portfolios had performed in the past, the Securities and Exchange Commission said in a complaint.
In addition to Stanford, the SEC complaint charged Antigua-based Stanford International Bank and two affiliates in Houston, Stanford Group and Stanford Capital Management.