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Sunday, October 19, 2008

Worldspace files for banktrupcty

WorldSpace Inc, the satellite radio broadcasting company has filed for bankruptcy in US. From July 2008 onwards, the company had changed it brand and corporate identity to 1worldspace (listed in NASDAQ as WRSP).

The company had been facing financial difficulties from 2006 onwards. The Maryland based company has a debt of more than $300 million. From the press release:

"The WorldSpace Board of Directors unanimously determined that Chapter 11 reorganization was necessary for the Company to engage in an orderly process to raise sufficient funds to repay its senior secured and convertible notes by means of either a sale of the Company or its assets, or a recapitalization of the Company.

WorldSpace will continue to operate its business and manage its assets as a debtor-in-possession under the jurisdiction of the court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the court. The holders of the Companys existing senior secured and convertible notes have agreed to provide, subject to the satisfaction of certain conditions, a debtor-in-possession financing facility of up to $13 million for a period of 90 days in order to facilitate a sale transaction. The financing facility is expected to enable the Company to continue to pay salaries of critical employees and continue operations which are critical to preserving the value of its core assets through the term of the facility."

India accounts for more than 150,000 subscribers which makes up to 90% of the total customer base worldwide. A R Rahman was chosen as the brand ambassador and he had composed a signature tune for Worldspace.

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Emails sent to India support center and Corporate Affairs remain unanswered. Till then, enjoy the signature tune by maestro Rahman.

Update: Worldspace India has responed to my email. "India operations to continue as usual."

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