Indebted Canadian wireless operator Mobilicity is negotiating with multiple parties to secure a takeover deal and has therefore decided to put off its recapitalisation plan.
Stewart Lyons, the small telco’s president and COO, said management was…
Indebted Canadian wireless operator Mobilicity is negotiating with multiple parties to secure a takeover deal and has therefore decided to put off its recapitalisation plan.
Stewart Lyons, the small telco’s president and COO, said management was “working diligently to reach an acquisition agreement” as it looks to satisfy creditors.
US telco Verizon Communications is looking at the possibility of entering the Canadian market and is reportedly in talks with Mobilicity.
Debtholders were set to vote on a recapitalisation plan today but the ballot was adjourned. Mobilicity can revive the recapitalisation plan and the vote if the sales talks are unsuccessful.
The challenger brand, legally known as Data & Audio-Visual Enterprises Holdings, reached an agreement to be acquired by Telus for C$380m in the spring – the large operator was after Mobilicity’s spectrum.
However the government said the frequencies could not be transferred due to competition fears. It subsequently presented a new policy on spectrum licence transfers that limits Mobilicity’s sale options. Telus withdrew its acquisition proposal.
Mobilicity, which is in financial difficulty, then decided to pursue a recapitalisation plan. That was set to be voted on in late June, and later got pushed back so that creditors could see the government’s new spectrum policy.
