The Globe and Mail reports wireless entrant Mobilicity is having trouble finding a buyer after “extensive marketing efforts” worldwide by its financial advisers who have reached out to “more than 30” potential buyers consisting of incumbents, other new entrants, international wireless carriers and U.S. private-equity firms, as detailed by court documents filed on behalf of the company’s recent restructuring.
The clock is ticking for Mobilicity as its debt holders are set to vote on two restructuring plans later this month on May 21, leaving little time for a sale:
“Given its current financial circumstances, the Mobilicity Group needs to either reach agreement with a willing buyer for its business who can finance the operations going forward, or it needs to restructure its capital and secure additional funding in order to advance its business,” reads a sworn affidavit of William Aziz, president of Blue Tree Advisors II Inc., who was retained to act as Mobilicity’s chief restructuring officer.
Mobilicity obtained Ontario court approval last month to pursue options for restructuring. If the company is unable to sell to a buyer, a recapitalization plan will kick in to keep the wireless upstart operation in the mean time. Chief operating officer Stewart Lyons said “The plan the company is pursuing leaves it in a good position and funded in any event as we continue to make progress pursuing various strategic options.”
TELUS was cited previously as being engaged in talks with Mobilicity over an acquisition, but nothing has materialized; Globe sources says the former is closely watching the latter’s restructuring process. Even if a deal does go through the final decision to approve such a sale would remain in the hands of Ottawa.
Mobilicity currently has 250,000 subscribers and pulls in about $6 million in monthly revenue–which still equates to an operating loss for the company, as it struggles to remain afloat even in its distressed financial situation.