WorldSpace files for bankruptcy

Sat-radio company seeking Chapter 11 protection

A satellite radio company has filed for bankruptcy.

No, not that sat-radio company.

WorldSpace said Friday it voluntarily filed for Chapter 11 protection, a move that will allow the company to continue to operate but has decimated its stock.

Shares of WorldSpace fell 69% to 18 cents Friday. Three years ago, shares traded for $20 apiece.

Because of the bankruptcy filing, the stock will likely move from the Nasdaq to the over-the-counter exchange or it will be delisted entirely.

WorldSpace has been trying for 18 years to make a business out of supplying subscription radio to Asia, Africa and Europe. Regulatory issues and other snafus, though, have hampered the company so severely that it has mustered only 172,000 subscribers, mostly in India.

Most recently, the company was gearing up to launch its service in Italy, but those plans are iffy now.

WorldSpace said a debtor-in-possession financing facility of up to $13 million, supplied by the company's existing noteholders, could allow it to find a buyer for some or all of the company in the next 90 days or so.

Absent that, the company could also raise funds in other ways, but that might be a longshot scenario with worldwide credit markets severely pinched nowadays.

WorldSpace, headquartered in Maryland, has two satellites in orbit and a third in storage.

The company's occasionally bizarre history includes allegations that major investors were tied to international terrorism. A company restructuring a few years ago solved the problem.

WorldSpace was also an early investor in XM, buying a stake for $150 million and selling it less than two years later for more than $200 million.

XM, of course, has since merged with Sirius to create Sirius XM, a thriving company with 18 million subscribers. Shareholders, though, have watched their investment fall nearly as much as have WorldSpace investors. On Friday, shares of Sirius XM fell a penny to 38 cents.