Judge Grants Mobilicity Right to Distribute Funds From Rogers Sale to Creditors
After receiving the green light from the federal government and the Competition Bureau, the Rogers-Mobilicity deal will close sometime this week. On Monday, a judge approved the distribution of the funds Mobilicity will get.
The order, which the judge signed Monday afternoon, will allow Rogers to assume Mobilicity’s assets free and clear of any claims against them apart from the small carrier’s trade liabilities, which Rogers has agreed to assume. The purchase price of the deal is $440-million and Rogers has agreed to assume $25-million in net negative working capital, according to a spokesman for Mobilicity.
As a result, Rogers will transfer some of the purchase funds as a loan to repay Mobilicity’s first lien, second lien, and debtor-in-possession (DIP) financing, so these creditors will recoup the money they gave to the carrier when it launched as well as accrued interest and penalties.
The remaining amount of the $465 million purchase price will go to the company’s unsecured creditors on a pro-rata basis, the court order says.
BNN has learned that Catalyst Capital Group, one of Mobilicity’s biggest individual bondholders, has inked a separate, confidential agreement with Rogers as part of the merger.
And so ends the road of a carrier that once aimed to provide “smart” wireless solutions to Canadians. What does this mean for wireless subscribers? We’ll see the answer on future cellphone bills.