Mobilicity in better cash position than expected

Mobilicity, the new-entrant carrier under bankruptcy protection, expects to end the year with more than 175,000 active subscribers and is spending cash at a slower pace than previously expected, court documents show. In a Dec. 12 affidavit filed with the Ontario Superior Court as part of the company’s bankruptcy proceeding, William Aziz, Mobilicity’s chief restructuring officer, said the company has lost customers at a rate of 5.1 per cent each month since it applied for creditor protection on Sept. 29, when it said it had 194,000 active subscribers. “The Applicants expect to end December with over 175,000 active customers,” Aziz said in the affidavit. “This figure would exceed 210,000 if inactive subscribers were included,” he added in a footnote. Ernst & Young — Mobilicity’s court-appointed monitor during the proceedings — said in a related report to the court that Mobilicity had a “cash balance” of $7.3 million on Dec. 6 after previously projecting that it would have $3.7 million as of that date. The firm projected that Mobilicity (formally called Dave Wireless Inc.) could now finance itself until Feb. 7 before it draws from a special financing arrangement set up to help the company get through a sale or restructuring process. Ernst & Young had previously projected that Mobilicity would need to draw financing from that arrangement in the first week of December. In his affidavit, Aziz said the company has cut down on its costs over the past two months by relocating its head office and by terminating employees “whose services were no longer required.” Mobilicity, Aziz added, is asking the court to extend — from Dec. 20 to Feb. 18 — its “stay” period, during which it is protected from creditors. The court, which will consider the request Thursday, previously extended the company’s stay from Oct. 30 to Dec. 20. In his affidavit, Aziz said Mobilicity wanted to extend its protection from creditors because it requires “more time to complete the Sale Process.” Mobilicity filed for bankruptcy protection in September after failing to recapitalize the company and as it petitioned the federal government to permit the company’s sale to incumbent wireless provider Telus Corp. It asked the court last month to approve a process to sell the company’s assets — including its spectrum and subscribers — after Industry Canada indicated that it would not allow Telus to acquire Mobilicity’s spectrum licences. After an earlier extension, the deadline for bids for Mobilicity’s assets was Monday at noon. Another new-entrant carrier, Wind Mobile (owned by Amsterdam-based VimpelCom Ltd.), confirmed last week that it had qualified to bid on the Mobilicity assets. With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Mobilicity in better cash position than expected

News | December 16, 2013

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Mobilicity in better cash position than expected

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