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Mobilicity delays vote on recapitalization till July 10; looks at 'alternatives'

Stockhouse Editorial
0 Comments| July 3, 2013

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(The Canadian Press) TORONTO _ Mobilicity has pushed back a vote on the company's proposed recapitalization plan by a week.

The struggling wireless service provider, which has reportedly held talks with U.S. telecom giant Verizon, did not give a reason for the delay Wednesday, other than saying it wanted to consider ``potential alternatives.''

The vote by debtholders, most recently scheduled for Wednesday after earlier delays, now is set for July 10.

Verizon is said to be considering entering the Canadian wireless market and has reportedly made an initial $700-million offer for Wind Mobile, another of Canada's small telecoms.

Together, Wind and Mobilicity have just over 850,000 subscribers between them, a fraction of the combined 25 million held by the country's big players, Rogers (TSX: T.RCI.B), Telus (TSX: T.T) and Bell Inc. (TSX: T.BCE).

However, Verizon, the largest American carrier, easily dwarfs them all with about 100 million subscribers.

``The board has rescheduled the vote on the recapitalization plan to allow it to consider additional potential alternatives for the company and its stakeholders, including customers, dealers and employees,'' president and chief operating officer Stewart Lyons said in a release.

Lyons made no mention of the reported talks with Verizon.

Mobilicity had earlier been the willing target of a $380-million buyout offer from Telus.

However, federal Industry Minister Christian Paradis quashed that idea last month, saying current rules that prevent the sale of Mobilicity's spectrum licence to one of the larger companies before 2014 would stand.

Formerly known as Data & Audio-Visual Enterprises Wireless Inc., Mobilicity provides no-contract cellphone service in Toronto, Ottawa, Calgary, Edmonton and Vancouver.

Under the recapitalization plan, the share capital of the company would be reorganized and certain debt repaid and Mobilicity would get funds to continue operating.


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