Mobilicity Gains Court Approval for Restructuring, Ready for Possible Sale
Mobilicity is preparing itself for sale, as today the company announced it had received approval from Ontario court to launch its “restructuring process,” possibly preparing for a possible sale.
The court orders allow Mobilicity to ask its debt holders to vote on a recapitalization plan and sale plan, both mutually exclusive but being pursued in parallel to fit an expedited timeline; voting will take place on May 21st.
According to The Globe and Mail:
The first is an “acquisition plan” that “provides a structure for an as yet to be determined purchaser to acquire all of the outstanding shares of Mobilicity.” The money from any potential sale would be used to repay all of the company’s outstanding first and second lien debt and its outstanding unsecured debt securities.
The second plan is an alternative arrangement – a “recapitalization” proposal that would be triggered if a sale of the company cannot be completed. Under such a scenario, a recapitalization would reorganize company’s “share capital,” facilitate the repayment of certain second lien notes and provide the carrier with badly-needed cash so it can continue to provide service to its customers.
Earlier this month reports cited TELUS as a potential buyer of Mobilicity. Along with the latter, WIND and Public Mobile are also up for sale, which puts the Federal government’s plans to expand wireless competition in jeopardy, if sales are approved.