Court could rule on Mobilicity sale

An Ontario judge is prepared to potentially consider a sale of Mobilicity and its wireless spectrum licences, court documents show. Industry Canada will have a chance to argue why it shouldn't. In an order released Wednesday, Ontario Superior Court Justice Frank Newbould laid out a formal process by which the court would consider a sale of Mobilicity and its spectrum licences as part of the new entrant carriers' ongoing bankruptcy proceedings. The company, he said, “shall be authorized to take all steps and actions, if necessary, with respect to Sale Transaction.” Under the court-approved process, Mobilicity must give Industry Canada at least 14 days' notice of a pending transaction to sell the company before applying to the court to authorize a sale under the Companies’ Creditors Arrangement Act (CCAA), the act under which Mobilicity has filed for bankruptcy protection. Other parties will then have 10 days to serve “responding materials,” the order said. Mobilicity can then file its reply comments up to two days before the start of a potential hearing to consider a sale proposal. Industry Canada, which issues spectrum licences in Canada, blocked in June Telus Corp.'s $380-million bid to acquire Mobilicity, citing rules from a 2008 spectrum auction that prohibit Mobilicity from transferring the licences it won at that auction to Telus — and other incumbent providers — for five years. Mobilicity asked Industry Canada in September whether it would approve a proposed sale of the company to Telus after the moratorium expires on Feb. 10. The government said in October that it does not want to see the new entrant’s wireless spectrum licences transferred to Telus, sources said. In new spectrum transfer rules also released in June, Industry Canada said all transfers of wireless airwaves would require ministerial approval, including those that result from a corporate acquisition. Those rules, which continue to apply to new entrants' spectrum licences after the five-year moratoriums expire, said the minister could block any deal that would result in “an undue concentration” of spectrum. In an email statement Wednesday evening, Industry Canada spokeswoman Stéfanie Power declined to say whether the department would serve as an intervener in the bankruptcy procedure if Mobilicity does put forward a potential sale. “All proceedings before the court are a matter of public record,” Power said. “The government will not approve spectrum-transfer requests that decrease competition in our wireless sector.” —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca CORRECTION: An earlier version of the story incorrectly reported the date of the court order.

Court could rule on Mobilicity sale

News | January 23, 2014

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