Canada’s industry ministry has blocked Mobilicity’s latest attempt to sell itself, reportedly to larger rival Telus, leaving the indebted operator to pursue a restructuring unless someone else comes in for it.
Following a court ruling last week,…
Canada’s industry ministry has blocked Mobilicity’s latest attempt to sell itself, reportedly to larger rival Telus, leaving the indebted operator to pursue a restructuring unless someone else comes in for it.
Following a court ruling last week, Mobilicity has creditor protection until 20 December to either find a buyer or execute a restructuring.
Industry minister James Moore’s director of communications told TelecomFinance that the government had made its decision by following the guidelines in the Spectrum License Transfer Framework.
“We will not approve any spectrum transfer request that decreases competition in our wireless sector to the detriment of consumers,” the spokesperson added.
A Mobilicity spokesperson said that discussions with Industry Canada were ongoing, without elaborating further.
It was the second time Telus has tried to acquire Mobilicity this year, having had a C$380m (US$374m) offer blocked by Industry Canada in June.
The ministry objected to the merger as the terms of Mobilicity’s AWS spectrum licence – which it acquired in the country’s 2008 auction – prevent it from being transferred until February next year.
Even after that date, the government has the power to review all transfers of spectrum licences and can block transactions which it deems may result in “undue spectrum concentration”.
Mobilicity, also known as Data & Audio-Visual Enterprises Holdings, is currently being protected under the Companies’ Creditors Arrangement Act. Ernst & Young has been appointed by the court to assist the mobile operator and its stakeholders.
