Mobilicity to remain under court protection until September 26, 2014


Mobilicity may well be the carrier with nine lives. Despite the fact that a merger with TELUS has fallen through, thanks in large part to the Canadian government, it continues to soldier on in five of the largest Canadian cities. It announced yesterday that it will now continue to operate under court protection under Canada’s Companies’ Creditors Arrangement Act (CCAA) until at least September 26, 2014.

Mobilicity has been under court protection since last September. The latest court documents reveal that it expects to have 155,000 active subscribers and 41 employees (after the departure of “24 employees whose services were no longer required”) at the end of June. With revenues and cash flow slightly higher than predicted, it expects to be able to continue to operate until September 26, assuming that “new customer acquisition remains stable, and monthly average revenue per customer continues to grow modestly.”

With the TELUS deal now dead, it remains to be seen what the longer term future holds for Mobilicity. It had described the TELUS deal as the only “acceptable transaction.” It is now likely looking at less attractive options including a merger with either Videotron or WIND Mobile, both of which had offered to acquire Mobilicity for substantially less.

Do you think Mobilicity can continue to limp along for much longer? Or will the courts simply pull the plug should it be unable to find a buyer over the summer? Let us know below what you think.

Source : Mobilicity