Mobilicity looking to auction itself off within weeks


With two attempts to sell itself to TELUS having been rejected by Industry Canada, time is running out for Mobilicity. The beleaguered carrier remains under protection from creditors under Canada’s Companies’ Creditors Arrangement Act (CCAA) but only until December 20 at this point in time. The company has now filed a court update requesting a court authorization to auction itself off.

Ernst & Young, acting as the court-appointed monitor, has determined that “the best course of action at this time is to commence a formal sale process” and is “intended to maximize stakeholder value through the sale, in one or more transactions, of all or substantially all of the Applicants’ business and assets.”

Should the court approve this move, Mobilicity will request that interested bidders sign up by December 2. The company expects that potential bidders will already be familiar with Mobilicity’s assets given that it has been looking to sell itself for over a year now. As a result, it expects that only a short timeframe will be required for the interested bidders to submit bids and has set the deadline of December 9 for their submission.

While Mobilicity still has some 189,000 customers (as of September), its most valuable asset remains the spectrum licenses it holds. It purchased those for CA$243 million back in 2008 in the last spectrum auction.

Much rides on the success of this auction as Mobilicity may not have any other options at this point.

Source : The Financial Post