(New throughout)
WASHINGTON, Jan 24 (Reuters) - XM Satellite Radio Inc. said Friday it completed a tender offer for senior notes, paving the way for the subscription radio service to obtain $475 million of financing that it said will keep it operating at least through the middle of 2004, and sending its shares as much as 10 percent higher.
The company expects to obtain $475 million additional financing.
The company, which is based in Washington, D.C., is receiving the financing from No. 1 automaker General Motors Corp. , which installs XM radios in 25 different 2003 vehicle lines, and a group of investors. Obtaining the financing was conditioned on successful completion of the tender offer, which totaled $300.2 million.
The new financing should help XM remain viable in a capital-intensive industry amid tight capital markets. This month, the company said it has signed up more than 360,000 subscribers,
Rival Sirius Satellite Radio Inc. , based in New York, said in November it might seek bankruptcy protection absent a restructuring involving a debt-for-equity swap.
"We believe the completion of these financings will fund XM through cash flow break-even," said Chief Executive Hugh Panero in a press statement. XM said on Friday it expects this will occur in mid-2004.
XM said bondholders who participated in the tender offer will receive 14 percent senior secured discount notes maturing in 2009, and warrants to buy XM common stock, in exchange for their 14 percent senior secured notes maturing in 2010.
The company said 92 percent of the eligible bonds were tendered, and that it expects to settle and close the offer on Jan. 28.
XM shares traded Friday morning on the Nasdaq at $4.80, up 30 cents, or 6.8 percent after trading as high as $4.95 earlier on Nasdaq. They closed Dec. 20, 2002, the last day of trading before it first announced plans to obtain the new financing, at $3.