Cash crisis for Worldspace
Worldspace is now just two weeks away from its special September 11 meeting, designed to seek shareholder approvals for various loans and pledges made over the past months. A contribution from a reader, clearly close to the Worldspace action, shows how dire the situation now is at the broadcaster.
On August 17 we reviewed Worldspace’s quarterly and half-year numbers that had just been released. Worldspace itself admitted that certain suppliers and employees were not being paid.
Our reader writes in response to that story: “[I’m] surprised that you chose not to mention that nearly 500 WorldSpace employees have not been paid since July 1 and July 15! Salaries have not been met on time since April. No communication in advance so staff mortgages, electric and basic bills all went unpaid... while COOs who bail out get their severance packages ...Employees in India, US and Italy are expected to still be in for their work keeping satellites up and radio stations working without any sign of pay...unpaid week after week…”
The comment talks about “COOs who bail out” and this refers to Worldspace’s two co-COOs who left the company on August 1 (Alex Brown and Greg Armstrong). Mr Armstrong received $50,920 in accrued holiday pay on departure while Mr Brown’s severance settlement has yet to be announced. Assuming this to be at least similar, the $100,000 or so paid to these two represents a large slice of the miniscule cash assets of just $1.2m in its coffers as at June 30.
Worldspace has a market capitalisation of $55m.