Sirius XM Bankruptcy Could Come Tuesday

Financially strapped Sirius XM Radio said Friday that it could file for bankruptcy as early as Tuesday if it cannot successfully negotiate with the holders of its debt.

The satellite radio company said it has exchanged $172.5 million of debt maturing in December for new debt due in 2011. But the company still has about $175 million coming due this Sunday.

Sirius is fighting against attempts for control by Charlie Ergen, the chief executive of Dish Network and sister company EchoStar . Ergen bought much of a $300 million batch of discounted Sirius bonds that come due next week. Sirius had rejected a previous offer by Ergen for control of the company.

Liberty Media is in talks with Sirius about possibly investing in the company. But the DirecTV, a Dish rival controlled by Liberty Chairman John Malone, is not involved in the negotiations, according to a person close to the situation. The person spoke on condition of anonymity because he is not authorized to talk about the negotiations. Liberty's participation in the talks were reported earlier by The Wall Street Journal.

Analysts said they didn't think DirecTV would want a satellite radio business, nor its satellites. DirecTV, the nation's largest satellite TV company, has launched new satellites and is focusing on enhancing its TV service.

Sirius has about $3.3 billion in debt maturing between now and 2014.

On Friday, Sirius swapped 10 percent convertible senior notes due this year for senior secured notes due 2011. In return the debt holders will get an annualized 10 percent interest in cash, plus 2 percent in kind in 2010 and 4 percent in 2011. They also received a fee of $9.45 million, of which $5.1 million was paid in cash and the rest in Sirius common shares at 7.4 cents each.

Shares of Sirius were up about 36 percent in afternoon trading.

• Get Real-Time Quotes for Sirius XM Radio

© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.