CRTC Calls for Submissions on Sirius XM Canada Changes in Ownership Structure

The CRTC has received an application by Sirius XM Canada Holdings Inc., on behalf of Sirius XM Canada Inc., for authority to effect changes in its ownership structure.  Sirius XM Canada Inc. is the licensee of the satellite subscription radio undertakings Sirius Canada and XM Canada.

The proposed transaction would be implemented by way of a court-approved Plan of Arrangement and would result in Sirius XM Canada Holdings, the parent corporation of the licensee, ceasing to be a publicly traded corporation. The Plan of Arrangement would, in turn, be implemented in three steps.

Step 1

Under the proposed reorganization, a new Canadian corporation, 2517835 Ontario Inc. (2517835 Ontario), would be capitalized by Obelysk Media Inc. (33.5%) and Slaight Communications Inc. (33.5%), being the two continuing Canadian shareholders, and by Sirius XM Radio Inc. (SXM-US – 33%), a non-Canadian entity pursuant to the Direction to the CRTC (Ineligibility of Non-Canadians).^Footnote1

Step 2

2517835 Ontario would acquire all the outstanding shares of Sirius XM Canada Holdings Inc.

Step 3

Lastly, 2517835 Ontario would amalgamate with Sirius XM Canada Holdings Inc. and continue under Sirius XM Canada Holdings Inc.

Following the proposed transaction, Sirius XM Canada Inc. would remain a wholly owned subsidiary of Sirius XM Canada Holdings Inc.

Sirius XM Canada Inc. would continue to operate the undertakings under the same terms and conditions as those in effect under the current licence.

As indicated by the applicant, the purchase price for the proposed transaction would be set at approximately $236.4 million.

The applicant did not propose a tangible benefits package, on the basis of its assertion that the proposed transaction would not result in a change of effective control.

Pursuant to the Direction to the CRTC (Ineligibility to Hold Broadcasting Licences) and to the Direction to the CRTC (Ineligibility of Non-Canadians) (collectively, “the Directions”), the Commission must be satisfied that the broadcasting undertakings are owned and controlled by Canadians and that the proposed ownership transaction furthers the public interest as expressed in the objectives of the Broadcasting Act.

In this context, the Commission will review the mechanisms by which Sirius XM Canada Inc. would ensure compliance with the Directions.

The Commission reminds the applicant that any instances of non-compliance will be examined in the context of the undertakings’ licence renewal.