WorldSpace, Inc. Gains Access to $2M in Interim Dip Financing and Commences Sale Process
The Bank Street Group LLC Appointed as Advisors in Conduct of Sale Process
Last update: 2:35 p.m. EDT Oct. 22, 2008
SILVER SPRING, Md., Oct 22, 2008
WorldSpace(R), Inc. a leading provider of satellite radio services outside the U.S., today announced it has received approval of the United States Bankruptcy Court in Delaware for the first part of an interim Debtor-in-Possession (DIP) financing in an amount up to $2M which will enable the Company to meet payroll obligations to critical employees and commence a process to sell the Company or its assets.
The Company, along with its U.S. subsidiaries WorldSpace Systems Corporation and AfriSpace, Inc., filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Delaware on Friday, October 17, 2008. In accordance with the terms of the DIP financing facility for which the Company has received initial court approval and intends to seek further approvals in the coming weeks, the Company has commenced a process to market and sell the Company or its assets, or complete an alternative restructuring transaction. The Bank Street Group LLC ( www.bankstreetgroup.com) has been appointed as the Company's financial advisor in support of the sale and/or restructuring process and all interested parties should contact Bank Street (Gary Grant, ggrant@bankstreetgroup.com or Richard Lukaj, rlukaj@bankstreetgroup.com) for further information.
In other announcements, WorldSpace appointed Robert Schmitz of Quest Turnaround Advisors, LLC as its Chief Restructuring Officer reporting to Chairman and Chief Executive Officer Noah Samara to assist the Company through an orderly sale or recapitalization process.
WorldSpace India, a wholly owned independent business unit operating in the market where most of the Company's customers are located and revenues are generated, has not filed for protection from its creditors and continues its business activities in the ordinary course.
As previously stated, 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 Company's existing senior secured and convertible notes have agreed to provide, subject to the satisfaction of certain conditions, a DIP financing facility of up to $13M 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.