TORONTO, April 17, 2014 /CNW/ - Data & Audio-Visual Enterprises Holdings
Inc. and its affiliates (collectively, Mobilicity) announced today a proposed going concern transaction in which TELUS
Corporation ("TELUS") would acquire Mobilicity for $350 million (the "Transaction"). The proposed Transaction, will be implemented pursuant to a plan of
compromise or arrangement under the Companies' Creditors Arrangement
Act (the "Plan").
Mobilicity has been operating under CCAA since late September of 2013,
with the completion of a transaction as its key initiative. The sales
process has been supervised by the Court appointed Monitor (Ernst &
Young Inc.) who supports and recommends the Transaction.
"The Transaction is a good outcome from Mobilicity's restructuring
efforts and extensive Sales Process," said William Aziz, Mobilicity's
Chief Restructuring Officer. "I am confident the Transaction will serve
the best interests of Mobilicity's customers and employees."
The Transaction provides for a complete continuation of Mobilicity's
business for the benefit of its stakeholders:
the vast majority of Mobilicity's one hundred and sixty five thousand
active subscribers will be able to seamlessly migrate onto TELUS'
advanced HSPA network after the transition.
no foreseen changes to employee staffing levels as a result of the
all of Mobilicity's retail landlords and licensors will have their
all of Mobilicity's landlords and licensors who provide space for
placement of Mobilicity's dealers and their employees who sell
Mobilicity's products will continue to benefit from those arrangements;
all service agreements with Mobilicity's business partners will continue
the trade claims of Mobilicity's creditors will continue unaffected
against the restructured Mobilicity and will be addressed in the
Over the past several months, Mobilicity, with the help of its financial
advisors and the independent, Court-appointed Monitor, conducted an
exhaustive process to explore all potential sales and other
transactions for the company. The Sales Process was a widely
advertised, competitive process that provided a fair and equal
opportunity for all parties interested in bidding for all or part of
Mobilicity's assets. In total, 25 organizations were contacted about
submitting bids as part of the Mobilicity Sales Process. Of the 25, six
organizations submitted participating materials and five bids were
received by the December 16, 2013 extended bid deadline. Of the five
bids, only the Transaction with TELUS was determined to be an
acceptable transaction. Approximately 95% of the holders of
Mobilicity's 15% senior unsecured debentures due 2018 also support the
Transaction and have agreed to vote in favour of the Plan.
Since January of this year a number of changes have occurred in the
Canadian market for commercial mobile services, including the expiry of
the moratorium on the transfer of Mobilicity's spectrum licences, the
successful completion of the 700 MHZ spectrum auction by Industry
Canada, the announcement by Industry Canada of its 2500 MHz spectrum
auction, the completion of Mobilicity's Court-approved Sales Process
and the Court-appointed Monitor's support for the Transaction with
In addition to being in the best interests of the company and its
stakeholders, Mobilicity believes that the Transaction will not affect
competition in the Canadian wireless sector, satisfies the criteria
considered by Industry Canada in determining whether to approve a
transfer of spectrum licences and meets Industry Canada's policy
objectives in respect of utilizing spectrum for advancing network
expansion into non-urban areas.
The proposed Transaction would be subject to conditions including
approval by the Ontario Superior Court of Justice (the "Court"), the Competition Bureau, Industry Canada, and Mobilicity's
Meeting of the Affected Unsecured Creditors to vote on the Plan
Mobilicity has today filed materials with the Court to seek, on April
23, 2014, an order (the "Meeting Order") permitting Mobilicity to hold a meeting of its Affected Unsecured
Creditors on April 30, 2014 to consider and, if appropriate, approve
the proposed Plan. A copy of the materials filed with the Court, and
provided to the Service List, is available on the Monitor's website at www.ey.com/ca/mobilicity.
The materials made available on the Monitor's website include the
proposed Plan, Notice of Meeting and forms of Proxy and Meeting Order.
None of the materials have yet been considered or approved by the
Court. However, any person who is a creditor of Mobilicity is
encouraged to review and consider the materials. To the extent that the Court issues the Meeting Order, Affected
Unsecured Creditors will have to submit their proxies to the Monitor by
5 p.m. on April 28, 2014. Please refer to the Monitor's website for
Mobilicity to file for extension, business as usual for wireless
On April 23, 2014, Mobilicity will ask the Court for an extension of the
current Stay of Proceedings from April 30, 2014 until June 30, 2014.
In the meantime, it continues to be business as usual for Mobilicity's
wireless customers. There are no changes to Mobilicity's network and
Mobilicity continues to honour prepayment plans for its customers.
Phones continue to work as they always have and Mobilicity's dealer
network is open for business.
"On behalf of our entire organization, I want to thank our valued
customers for continuing to stand by us as we progress through this
process," said Mr. Aziz. "We have found them a good home with TELUS."
For more information, please visit www.mobilicity.ca/investorrelations or www.ey.com/ca/mobilicity. Creditors can contact the Monitor by email at firstname.lastname@example.org or by phone at 1-855-287-4005.
About Mobilicity (DAVE Wireless):
Mobilicity, Canada's smart mobile carrier, was created to bring down the
cost of wireless with unlimited talk, text and data plans, affordable
North American coverage, plus popular handsets and smartphones -without
locking customers into contracts or charging extra or hidden fees.
Formerly known as Data & Audio-Visual Enterprises Wireless Inc. (DAVE
Wireless), further information about Mobilicity can be found at www.mobilicity.ca.
For further information:
Joel Shaffer 416-649-8006
Nick Anstett 416-649-8008