Mobilicity to seek creditor protection extension
GTA-based mobile company says it has received expressions of interest to acquire all or part of its business.
Toronto Star
February 18, 2014
By Michael Lewis
Wireless service provider Mobilicity will appear before a judge on Feb. 26 to request another extension of its protection from creditors, chief restructuring officer William Aziz said Tuesday.
He said an affidavit will be filed in Superior Court on the Wednesday, the day the carrier’s current stay expires, although he said the length of added time to be requested has not been determined.
Aziz said the company, whose legal name is Data & Audio Visual Enterprises Wireless, has an untouched line of debtor-in-possession funding sufficient to maintain operations.
He reiterated that the GTA-based company has received expressions of interest to acquire all of part of its business.
Observers said a transaction that sees one company buy Mobilicity’s customer base of about 175,000, its cell towers and other infrastructure and another buying its radio wave spectrum could ultimately emerge.
Aziz said Mobilicity has not tabled a new request with Industry Canada for a transfer of its spectrum licenses.
B.C.-based telecom Telus has sought to acquire the spectrum but Ottawa has said it will reject spectrum transfers that would lessen competition in the mobile industry.
Mobilicity was granted protection at the end of September after its attempt to win market share from incumbent carriers with discount offerings triggered steep losses.
Mobilicity, which operates in Toronto, Ottawa, Calgary, Edmonton and Vancouver, is pursuing a sale under court-appointed monitor Ernst & Young LLP
In an earlier affidavit Mobilicity said it has “maintained stability” and implemented cost reductions, including moving its head office out of Vaughan and into a “smaller premises” in Woodbridge, and has “terminated certain employees who’s services were no longer required.”
Mobilicity creditor Catalyst Capital Group Inc. has said it would consider supporting a merger of Mobilicity and another smaller carrier, Wind Mobile to form a fourth major competitor in Canada’s wireless market.
Wind has reportedly bid $190 million for Mobilicity, and Scotiabank analyst Jeff Fan has said in a note that Quebecor, owner of wireless operator Vidéotron, has signed a non-disclosure agreement with Mobilicity.
