Sirius XM Up to Its Ears in Debt

Sirius XM (SIRI Quote) finds itself in a tough financial position with little light at the end of the tunnel amid concerns over the satellite radio provider's ability to repay or refinance a bevy of debt obligations due next year.

That news is undoubtedly hard for shareholders to swallow, as they've already seen the value of Sirius XM's stock tumble more than 65% since the merger between Sirius and XM was completed in late July.

Shares have closed under $1 for more than a week now, opening the door to the possibility that a Nasdaq delisting notice -- which gives the company six months to shape up or ship out -- could soon follow if the stock were to remain at these levels for another three weeks.

Even though the company will likely continue to operate its satellite radio programming as shares spiral further and further towards zero value, Sirius XM shareholders will be the ones left holding the bag.

Sirius XM has the unenviable task of handling more than $3 billion in debt, with just more than $1 billion of that pie coming due in 2009.

Nearly five years ago, Sirius issued $300 million in convertible senior notes that will represent the first milestone debt repayment when they mature in February 2009. The company has given no indication how it will meet that obligation.

Beyond that, Sirius XM has hopes of extending the maturities of another $350 million in debt due in May, and it also expects to refinance the $400 million in XM convertible debt that comes due in December. CEO Mel Karmazin said during the company's last conference call that he expects that Sirius will break even by that point, which would help with the refinancing.