Globalive, the parent company of Canadian alternative operator Wind, hopes for more international funding for expansion following an important court ruling yesterday.
Anthony Lacavera, CEO of Globalive, told Reuters that the company was now in a…
Globalive, the parent company of Canadian alternative operator Wind, hopes for more international funding for expansion following an important court ruling yesterday.
Anthony Lacavera, CEO of Globalive, told Reuters that the company was now in a position to raise additional funding. He was prepared to dilute his stake, the CEO said in the interview.
The remarks, which were confirmed by the company, came after a court ruling denying competitor Public Mobile leave to appeal an earlier decision in a dispute about the application of foreign ownership rules to Globalive.
The court ruling would now allow foreign investors to take a stake in Globalive, the CEO reportedly argued.
New funds could be use to acquire spectrum in an auction to be held in 2013. According to the article the CEO expects the company will have to spend between C$300m and C$500m (US$305m to US$508m) for the acquisition of spectrum.
Lacavera also said he thinks potential buyers would like to take over Globalive, but that he does not plan to sell the business.
Yesterday’s court ruling puts an end to a long legal process over the last two years, which initially focussed on the issue of whether Wind Mobile’s ownership structure violates the strict Canadian foreign ownership rules.
Subsequently, the controversy surrounded the position of the Canadian government, particularly whether it had exceeded its authority under the Canadian Telecommunications Act in this case.
The Telecommunication Act states that for a telco to operate in the country, at least 80% of its board positions and voting shares should not be held by non-Canadians. It also demands, in terms that have been widely criticised as ambiguous and subjective, that “the corporation is not otherwise controlled by persons that are not Canadians”.
100% of voting shares in Wind Mobile are held by Canada-based holding company Globalive Investment Holding Corp (GIHC).
Egypt-based telco Orascom Telecom holds a 65% equity stake in Wind. But its voting share in GIHC is just 33%. This minority voting share, Wind argued, means that the company does pass the conditions set out in the Telecoms Act.
Globalive commented that yesterday’s court ruling “conclusively ends Wind’s long running regulatory and legal battles with its competitors over its compliance with Canadian ownership rules.”
