XM Satellite Radio has secured a new $450 million financing package that should give it enough cash to stay in business through 2004. The package consists of $200 million in new funds from investors and $250 million in payment deferrals and related credit facilities from General Motors, the company said.
Washington, D.C.-based XM has reportedly spent $1 billion so far on its satellite-based national radio service and hopes to have enough subscribers to financially support itself within the next year. For example, GM is currently factory-installing XM radios in 25 different 2003 vehicle lines in response to growing interest in satellite radio service from consumers, according to the company.
"With this financing package, we believe we have achieved full funding through cash flow breakeven," said Hugh Panero, XM's President and CEO. "The financing also removes a major roadblock to our company being valued based on its marketplace progress, business plan execution and future economic potential."
Based on sales-to-date and projections through the end of 2002, XM expects to have more than 350,000 radios sold and ready for activation. The actual year number of subscribers with activate satellite service is expected to be between 340,000 and 350,000, the company said.