Monday, January 05, 2009

From bad to Worldspace

I have always been critical of the Worldspace operation, especially the over-hyped success claims in the mid 1990's (reaching 3.4 billion people was the slogan at ITU Telecom I seem to recall). No station on the satellites really had a business model for being there - mostly because radio stations are local and national - and the few international broadcasters on the planet never really committed to the Worldspace proprietary system. In short, Worldspace was a solution shot into space that then started looking for a problem. It was marketing schemes on steroids with no clue about how radio really works, especially in developing countries.

Chris Forrester of RapidTVNews published a fascinating list of creditors just before Christmas.

The major claims are already in, not least Worldspace’s lavish travel and expenses debt to American Express amounting to more than $300,000. The grand total of its debts and obligations (some of which are disputed) comes in at more than $2bn.

Worldspace itself estimates it has between $100m-$500m in assets, although states it has more than $1bn in liabilities and obligations. The Chapter 11 filings refer only to Worldspace Inc., Worldspace Systems Corp., and Afrispace Inc., and makes no mention of the other businesses, or its Asian satellite. There is also a royalty agreement in place and shown as a debt amounting to a staggering $1.81 billion.

Then there are assorted creditors who helped bail out the business through its most recent struggles. These include Highbridge Capital Management ($27.6m), Och-Ziff Management ($7.9m), AG Offshore ($2.3m) and Citadel ($35.1m) for a total of $72.98m. Bank of America has a (disputed) claim in for $1.6m.

Its ‘Top 30’ creditor list includes:

• Yenura Pte Ltd (a Singaporean company in which Worldspace’s founder Noah Samara, pictured above, has close links) is owed (unsecured) $55.2m and is considered an “insider company” under US rules.
• Micronas GmbH, a chip-developer in Germany, is owed $18.2m.
• Fraunhofer Inst for Integrated Circuits, in Germany, is owed $4.45m.
• Flextronics Inc, is owed $2.34m, although this debt is disputed.
• Thales Alenia Space, is owed $2.2m.
• Delphi Delco Europe, is owed $1.22m.
• Baker & McKenzie, is owed $1.148m.
• International Space Brokers, is owned $990,366.
• SED Systems, is owed $986,277.
• IFPI of Hong Kong, is owed $948,152.
• Phonographic Perf. of India, is owed $657,894.
• Astrium SES, is owed $650,549.
• Sanyo-Mgt of Osaka, is owed $612,250.
• Delphi Electronics of Indiana, is owed $600,000.
• ST Microelectronics of Italy, is owed $600,000.
• SAMRO of Johannesburg, is owed $592,852.
• Accenture LLP is owed $523,931.
• BPL Techno Vision of Bangalore is owed $506,046.
• Antrix Corp of Bangalore is owed $483,661.
• Performing Rights Soc, of UK, is owed $400,967.
• ESPN Star Sports is owed $400,000, although this debt is disputed.
• American Express Travel is owed $336,943.
• Fiat Grp, of Turin is owed $304,375.
• Gabon Telecom, is owed $290,963.
• University of Chile, is owed $286,740.
• SAP America is owed $277,113.
• Wistron NeWeb of Taiwan is owed $259,995.
• Paul, Hastings, Janofsky & Walker, is owed $243,443.
• Certicom Corp of Virginia is owed $235,097.
• Microsoft is owed $231,679.

I wonder why the University of Chile got involved for such a large sum. What a total mess.
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