A potential deal between international satellite radio service WorldSpace and Liberty Media unit Liberty Satellite Radio has been called off. In a brief statement released Tuesday, WorldSpace said its "strategic transaction negotiations with Liberty Satellite Radio, Inc., its debtor-in-possession lender, have been terminated by Liberty. WorldSpace is awaiting information from Liberty as to its expectations as WorldSpace's secured lender with respect to the handling of Liberty's collateral. In the interim, WorldSpace is planning for a potential de-commissioning of its satellites and reviewing its strategic alternatives in light of the termination of negotiations."

Liberty owns all of WorldSpace's debt and a 40 percent share of Sirius XM, and had been expected to bring the two satcasters together with this deal. Combining with WorldSpace would give Sirius XM a much larger reach overseas and around the globe. The majority of WorldSpace's subscribers are in Asia and Africa.

Last year, Mel Karmazin commented that WorldSpace would be a good strategic partner for Sirius XM, if they were linked together by Liberty.