XM Stock Sale May Fund New Satellite

By | September 9, 2003 at 12:00 AM

The company has priced a public offering of approximately 11.3 million shares of class A common stock – with expected net proceeds of around $150 million – that it will use to pay for construction of a new ground-spare satellite if its is unable to collect enough from its insurers in time to build the satellite. XM recently announced that it plans to launch its current spare satellite late next year due to the premature aging of its two orbiting satellites; it’s pursuing efforts through its insurers to be compensated for the shorter-than-expected life spans. If the insurers pay up, XM plans to use the proceeds of the stock sale for working capital and general corporate purposes, which may include the repurchase or prepayment of outstanding debt. Legg Mason Funds Management, Legg Mason Capital Management and another unnamed large institutional investor are the main investors in the new stock offering.