On Command Warns It May Run Out Of Cash

DENVER— On Command Corp., which provides in-room movies to hotels, has warned investors that it could run out of money by February because of unpaid outstanding bonds, according to recent filings with the Securities and Exchange Commission.  On Command either needs its parent company, Liberty Media Corp., to pay off the bonds or to get more people to watch movies in their hotels and prove to lenders the company is a viable one.  “We believe we have a number of alternatives that are open to us, but they really hinge on affective performance,” said Chris Sophinos, chief executive officer of On Command. “The key is to show we can move that needle and show that we are in control of the business.”  On Command received a $60 million investment from Liberty Media, its biggest shareholder, two months ago. But On Command warned investors more recently that it will burn through the money and another $16.9 million in revolving credit by next spring, according to its most recent filings with the SEC.  On Command cannot raise any more money due to financial covenants on the bonds taken out by Ascent Entertainment — which is owned by Liberty. The covenants prohibit the holdings from acquiring any additional debt until the bonds are paid off.  The Ascent bonds are due in December, but Liberty has not indicated it will pay them off. As yet, only $224,650 of the $225 million in bonds has been paid.  On Command is meeting with banks and lenders to come up with alternative financing. But those deals will depend upon getting more travelers to buy in-room movies and improving the companys operations, said Sophinos. The company will roll out pricing changes this fall on some of its movie and Internet services, add a new Internet TV browser in October, add more new movies and start an aggressive promotional campaign next month to get more hotel visitors to watch movies.