NEW YORK (Reuters) - Shares of Sirius XM Radio Inc fell 28 percent on a report about the satellite radio provider's ability to meet its looming debt payments and the possibility that it might seek bankruptcy protection.
The shares, which had languished in recent weeks around 11 cents a share, fell to 8 cents on Wednesday, after the New York Times reported that Sirius has been working with advisers on a possible Chapter 11 filing.
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Sirius has $175 million of convertible notes maturing on February 17, $350 million of secured bank debt due in May 2009, and $433 million in convertible notes due December.
Analysts said that while Sirius Chief Executive Mel Karmazin had boasted that the company would meet its debt obligations, the tight credit market may have made that task more difficult as the payment date draws near.
"Sirius's options have dwindled," said Stanford Group analyst Frederick Moran. "This first refinancing hurdle, while only a small percentage of the company's debt, comes at a very difficult time relative to the credit market."
(Reporting by Franklin Paul, editing by Dave Zimmerman)
