Mobilicity seeking court-supervised sale of assets

Struggling new entrant carrier Mobilicity is asking the Ontario Superior Court to supervise a sale of some or all of the company's assets as a potential alternative to a twice-rejected deal to sell itself to Telus Corp., court documents show. In an application filed last week as part of the company's ongoing bankruptcy-protection proceedings, Mobilicity said the launch of a “formal sale process” is in its stakeholders' best interests, and that the process should be flexible enough to allow the company to be sold off in pieces. “A number of parties have expressed interests over the past weeks and months in some or all of the assets of the Mobilicity Group,” the company said in a Nov. 7 application to the Ontario Superior Court. “A Court-supervised sale process will allow those interests to be considered in a fair and organized manner.” Mobilicity, formally called Dave Wireless Inc., sought offers from potential buyers this summer after struggling to add subscribers since launching wireless services in 2010. In June, Industry Canada blocked Telus' first $380-million bid to acquire Mobilicity, citing a moratorium on incumbent carriers—such as Telus—from acquiring the wireless air waves Mobilicity bought as a new entrant to Canada's wireless market in the 2008 spectrum auction. Mobilicity filed in September for bankruptcy protection under the Companies’ Creditors Arrangement Act (CCAA) and was granted a temporary stay from paying its debts as it lobbied the government to approve a second proposed sale to Telus. Industry Canada told Mobilicity in a confidential communication last month that the government does not want to see Mobilicity’s wireless spectrum licences transferred to Telus because of concerns related to spectrum concentration. In its application, Mobilicity said it “continues to have a dialogue” with Industry Canada about the Telus deal “and other additional matters related to transactions affecting the Mobilicity Group's business.” It added that it is also “considering other alternatives to maximize the value of its assets for the benefit of its stakeholders,” and that “the best course of action at this time is to commence a formal sale process for the Mobilicity Group and its assets.” William Aziz, Mobilicity's chief restructuring officer, said in a Nov. 7 affidavit that Mobilicity's assets include its spectrum licences, subscriber base, “network hardware assets,” property leases and tax losses. He said Mobilicity's management believes a single sale of the company “is the optimal solution” for its stakeholders, though he added that the proposed sale process provides the company with the “flexibility” to sell off its individual parts. Under its proposed sale plan, Mobilicity would solicit bids in an effort to sell “substantially all” of its assets through “one or more transactions.” Ernst & Young Inc., which is serving as Mobilicity's monitor during bankruptcy proceedings, would be tasked with determining which bid, or bids, are successful, if any. Mobilicity is expected to appear in court on Wednesday to request permission to proceed with its proposed sale plan. If it is successful, the company would accept applications to determine qualifying bidders until Dec. 2, with the formal bidding process initially scheduled to conclude on Dec. 9. The case is before the Ontario Superior Court under court file number CV-13-10274-00CL. —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca.

Mobilicity seeking court-supervised sale of assets

News | 11/12/2013 2:20 am EST

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