Worldspace Chapter 11 ignores India
Worldspace's India operation is not included in its Chapter 11 bankruptcy. Worldspace is also advancing its sale process. Founder Noah Samara is still at the helm.
Worldspace has been given the Delaware Bankruptcy Court's permission to draw down its first slice of funding, $2m, in order to pay back-salaries of key staffers. Worldspace told the Court it would be back for more. Its creditors have earmarked a total of $13m for the rescue plan.
On the sales front, the company has now formally appointed Bank Street Group to help with the sale or financial reconstruction of the US-based business, and appointed Robert Schmitz of Quest Turnaround Advisors, as its Chief Restructuring Officer. Mr Schmitz reports to Samara and will "assist the Company through an orderly sale or recapitalization process," said Worldspace's FCC filing.
"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," said a company statement. Worldspace has about 171,000 subscribers, mostly in India.
A report in India, quoting local officials, says Worldspace India is to be revamped, although with lower subscription fees. K.S. Murlidhar, head of the Worldspace India operation, told Livemint, that Worldspace "filed for bankruptcy to be able to access funds for our expansion plans. We also needed to repay debt for which we needed funds. Also by filing for bankruptcy protection, we wanted to thwart any hostile takeover bids," Murlidhar said.