MUMBAI: Nearly two weeks after Worldspace Inc pulled the rug from under its India operations team, the Worldspace India office has put forth an official statement.
The statement, that has been issued ‘to clarify doubts relating to the credibility of the operations of Worldspace India and its employees’ says that Liberty Media conducted a detailed Due Diligence of the India operations in September and October 2009, engaging reputed Indian firms.
‘Senior officials of Liberty Media were in regular touch with the Worldspace India team and were given to understand that they were keenly interested in the Indian operations. Against all odds in these difficult circumstances, the India team did their best to meet the aspirations of our Indian subscribers and successfully spearheaded Worldspace India to its best ever financial and business performance in the last 12 months. All along, no instructions were issued to Worldspace India to stop the sales of the receivers and subscription packs of Worldspace, Inc., and the service agreement was still in force. The employees in India continued operations in the ordinary course, being led to believe that the operations would be sold along
with the assets as a going concern,’ the statement says.
Related Post
India is the most successful market of Worldspace anywhere in the world, accounting for more than 95% of its business worldwide.
Liberty Media has, through the a Chief Restructuring Officer (CRO), in the week of Christmas communicated that they will not be acquiring the India operations though they are acquiring the satellite assets and technology related to the India operations, thus leaving the Indian operations and the employees to deal with the situation on their own. ‘However much the
India team would like to continue operating and servicing its subscribers, it has become impossible because of the non-availability of the Worldspace satellite for Indian operations, which has been the sole distribution vehicle for its content’, the statement says.
In summary, the Worldspace India team says that it was neither a party to the decision to close down the Indian operations nor was aware of this possibility till this decision was communicated by the US headquarters, in the later part of December 2009. The India team’s commitment to its subscribers and also its unawareness of the situation can be well gauged from the fact that they launched a new specialty Christmas channel, Holly, ahead of Christmas- New Year.
The statement says that the employees of Worldspace India are the worst affected because of this unfortunate decision by Liberty Media/Worldspace Inc.
‘While it is learnt that Liberty Media and Worldspace Inc, USA have cleared employee dues and followed due process in every other country, certain loopholes in the Indian legal system are being misused to escape from the responsibilities of orderly closure of the business, which has led to this situation where both subscribers to the service and employees of the company are badly affected,’ it adds.
The statement also adds that Worldspace, Inc owes Worldspace India a sum in excess of Rs. 45 crore (Rs 450 million) towards services performed by it. The employees of Worldspace India have made representations to the ministry in this matter, the statement says.
To recap the Worldspace issue – In October 2008, Worldspace, Inc., USA in consultation with its secured creditors filed a petition in a US court under chapter 11 of the US Bankruptcy Code for restructuring of its debts Under Chapter 11, the company gets protected from recovery attempts by its creditors and the company continues its operations in the normal course pending restructuring. Worldspace, Inc. was not into liquidation or winding up as is sought to be made out. Worldspace India was not included while filing for protection under Chapter 11 of the US Bankruptcy code and the management & employees of Worldspace India were directed by its parent company to continue its operations as business as usual….
A Chief Restructuring Officer (CRO) appointed in October 2008, initiated proceedings to restructure the debts and the court directed the sale of Worldspace, Inc., and its assets; Worldspace India being a wholly owned subsidiary is one such asset of Worldspace, Inc.
Worldspace India, as was understood, was to be sold as an operating concern to prospective bidder/s in the auction process. In March 2009, Worldspace, Inc., entered into an Asset Purchase Agreement with Yenura Pte Ltd, a Singapore based company. The Agreement included the sale of Worldspace India as an operating concern. Thereafter, Liberty Media, a multi-billion dollar media company in the USA, purchased the liabilities and stepped into the shoes of the secured creditors. Later, the Asset Purchase Agreement with Yenura Pte Ltd. was cancelled.
Liberty Media has substantial stakes in XM Sirius which is the only satellite radio service provider in the world other than Worldspace.
