Financially stricken Canadian cellco Mobilicity has announced that larger national rival Telus has agreed terms to acquire the company for CAD350 million (USD317.56 million) in a transaction to be implemented under the Companies’ Creditors Arrangement Act (CCAA). Mobilicity has been operating under CCAA since September 2013, with the completion of a takeover transaction as its key initiative. The sales process has been supervised by court-appointed monitor Ernst & Young, and the press release said the takeover ‘provides for a complete continuation of Mobilicity’s business for the benefit of its stakeholders’, while ‘the vast majority of Mobilicity’s 165,000 active subscribers will be able to seamlessly migrate onto TELUS’ advanced HSPA network after the transition,’ and there are ‘no foreseen changes to employee staffing levels as a result of the proposed transaction.’ The release added that ‘approximately 95% of the holders of Mobilicity’s 15% senior unsecured debentures due 2018 support the transaction’, which remains subject to approval by the Ontario Superior Court of Justice, the Competition Bureau and Industry Canada as well as Mobilicity’s debtholders. The green-light is by no means guaranteed, as Industry Canada has twice blocked the deal under its spectrum transfer policy aiming to restrict acquisition of new entrants’ 3G/4G frequencies by national incumbents.
On 23 April 2014 Mobilicity will ask the court for an extension of the current Stay of Proceedings from 30 April until 30 June, while on 30 April its creditors will meet to vote on the latest proposed deal with Telus.