Struggling wireless startup Mobilicity has for a second time postponed a bondholder vote on a proposed recapitalization plan.
Vaughan, Ont.-based Mobilicity said the vote – scheduled for Wednesday – has been put off one week, to July 10, so that the board can “consider additional potential alternatives for the company and its stakeholders, including customers, dealers and employees.”
The vote had already been delayed, from June 25 to July 3.
Mobilicity, legally known as Data & Audio-Visual Enterprises Holdings Inc., is in talks to be acquired by U.S. giant Verizon Communications Inc., according to sources.
Although those discussions are said to be early-stage, Mobilicity has signed a non-disclosure agreement with the New York-based communications company as the parties assess the possibilities.
At the same time, Mobilicity’s various bondholders are said to squabbling over who controls the company at this stage. There are also disagreements about which noteholders are best-positioned to be dealing with Verizon as part of any potential acquisition talks.
Verizon, meanwhile, has made an initial $700-million offer for another Canadian startup, Wind Mobile, and is considering whether to participate in the upcoming auction of the 700 Megahertz frequency – a move that could help salvage the federal government’s goal of ensuring there are at least four wireless carriers in every regional market.
Mobilicity is mulling whether to proceed with its recapitalization plan as a contingency measure to shore up its balance sheet after Industry Minister Christian Paradis rejected a $380-million acquisition proposal from Telus Corp. last month.
Telus has refused to comment on whether or not it will make another bid for Mobilicity once a federal ban on incumbents purchasing new-entrant wireless spectrum expires next year.
Last week, Mr. Paradis unveiled the government’s long-awaited policy on spectrum transfers between telecom carriers.
In doing so, he said Ottawa plans to review all applications on a “case-by-case” basis. Although Mr. Paradis stated that any proposals that result in “undue spectrum concentration” that “diminish competition” would not be allowed, he stopped short of setting prescriptive thresholds – signalling his office plans to be the final authority on whether new-entrant carriers and their investors would be allowed to proceed with any potential exit strategies.
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