TORONTO – After close to two years in creditor protection and having had a pair of prior sales to Telus rejected by the federal government, Mobilicity and its creditors believe it finally has its suitor.
The company and its creditors will file this motion with the Ontario Superior Court of Justice Wednesday morning to approve and authorize the sale of the company to Rogers Communications for $465 million, a deal which was accepted yesterday by the shareholders, according to the court documents. That is substantially more than what Telus offered ($380 million) in June of 2013, before the upstart wireless company entered CCAA protection. That deal was rejected by Industry Canada.
While the federal government has been telling the Canadian wireless industry for some time it would not allow the sale of Mobilicity to any of the big three due to its concerns of spectrum concentration among Rogers, Telus and Bell, recent spectrum auctions which have expanded everyone’s spectrum holdings (except Mobilicity, which could not afford to take part) have softened the government’s stance, apparently.
“In light of recent developments in the Canadian wireless industry and specifically recent auctions of spectrum, Industry Canada no longer has the same concerns it once did about ‘undue spectrum concentration’ among certain wireless carriers in Canada that were an impediment to prior sale transactions,” reads the motion.
“To date, the chief impediment to concluding a successful sales process has been Industry Canada's refusal to approve the transfer of the Mobilicity Group's spectrum licenses to an incumbent wireless carrier,” added Mobilicity’s chief restructuring officer Bill Aziz in his affidavit submitted with the motion.
“The Rogers Sale will result in a going concern sale of Mobilicity's business.” – Mobilicity motion
“It is my understanding, given recent developments in the Canadian wireless industry and specifically recent auctions of spectrum, that Industry Canada no longer has the same concerns it once did about 'undue spectrum concentration' among certain wireless carriers in Canada. Given the change in Industry Canada's position, the Mobilicity Group has been discussing a prospective sale with interested parties over the past several weeks.”
While some reports speculated over the past few days that any such sale would see the end of Mobilicity, the Rogers deal, finalized only on Tuesday June 23rd, would apparently see the company continue on under the Rogers umbrella, according to the motion.
“The Rogers Sale will result in greater proceeds to stakeholders than any other prior attempt to sell the business of the Mobilicity Group to date; (i) In addition, the Rogers Sale will result in a going concern sale of Mobilicity's business, leaving all of Wireless' obligations to trade creditors, employees, dealers and other obligations to be assumed by the Purchaser unaffected; services for subscribers will also continue uninterrupted,” reads the motion.
After court approval, the transaction still must be approved by Industry Canada.
More to come.
