TORONTO – The potential sale of Mobilicity to one of the wireless incumbents could come down to a battle between Industry Canada and bankruptcy court, according to one analyst.
A research note by Scotia Capital analyst Jeff Fan speculates whether Mobilicity, which filed for bankruptcy protection on Monday, could use the bankruptcy proceeding to get around Industry Canada’s five-year limit on the transfer of its wireless spectrum. That limit is set to expire in February 2014.
“We are not certain whether the bankruptcy court has sufficient power to effectively overrule IC's (Industry Canada’s) decisions”, reads the note. “But Mobilicity stakeholders may have limited options given the minimal interest shown by investors/operators to create a viable fourth operator in Canada.”
Fan’s note added that “transferring the spectrum licenses to one of the incumbents will result in the highest proceeds for Mobilicity stakeholders.”
