Sirius XM Radio assumes some “Sirius” debt

[RiseStar]

Now that the post merger confetti and party hats have been swept up and the smoke is beginning to clear, its become painfully obvious that the combined companies have some serious debt management issues to take care of if the new satellite radio powerhouse is to swing to profitability anytime soon.

Upon merging, Sirius XM Radio Inc. now faces a substantial $3.4 Billion debt, of which nearly a third ($1.1 Billion) will become due in 2009. Sirius Radio, as a standalone company was making headway towards eventual profitability, showing solid subscriber growth of nearly 25% over the previous year, moving from 7.1 million subscribers to nearly 8,9 million, as well as an increase in per subscriber revenue. Additionally, its quarterly losses and subscriber acquisition costs were also down from the previous year.

XM Radio had finished off the quarter, adding a little over 322 000 new subscribers, bringing them up to 9.7 million customers in total, an increase of newly 17% over the previous year. XM’s quarterly losses were down as well.

Now with a combined subscriber base of 18 million+, the company has announced that they expect to trim over $400 million in costs in 2009. Market analysts have stated that they expect to see Sirius turn a profit within 2 years at current growth levels.

Sirius XM Radio Inc. has also recently announced that customers can expect dual service radios to be on the market in very early 2009, likely with some making their debut at the Consumer Electronics Show (CES 2009) in the first week of January 2009.