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A Wind Mobile store.

Sarah Dea/The Globe and Mail

The federal government has approved a deal to recapitalize wireless startup Wind Mobile that sees control of the company transferred from founder Anthony Lacavera to a consortium of Canadian and U.S. investors.

Industry Minister James Moore announced the approval in a statement Tuesday afternoon, noting that Wind has committed to maintain its headquarters in Canada, ensure a majority of its head office employees are Canadian and "significantly invest capital" with the aim of purchasing more cellular airwaves and expanding the business.

The transaction was structured so that Mr. Lacavera's holding company Globalive Capital (formerly known as AAL Corp.) first bought Amsterdam-based telecom conglomerate VimpelCom Ltd.'s interest in the company outright. That did not require regulatory approval, as Globalive already controlled Wind.

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The second step of the deal involved Industry Canada reviewing the transfer of control from Globalive to AAL Acquisitions Corp. – the consortium of financial players that agreed to refinance the company – under the foreign investment review considerations of the Investment Canada Act, which requires that there be an overall economic benefit to Canada.

"In making my determination, I concluded that this acquisition will contribute to a more robust and competitive wireless industry in Canada," Mr. Moore said in a statement.

He said Industry Canada has also approved the transfer of Wind's spectrum licences to the new owner and that no further government approvals are required for the acquisition.

Mr. Lacavera still has a financial interest in the company through Globalive and remains chairman of Wind's board, although he named former chief operating officer Pietro Cordova as chief executive officer last week.

"Wind Mobile is pleased that its recent financing has received all required regulatory approvals," Mr. Lacavera said in an e-mail, adding that the approvals signal the company's stable ownership. "Wind Mobile has been in some form of regulatory trouble since inception, and I am very pleased we have now put these difficulties completely behind us."

Wind reached a deal in September for Globalive to buy out VimpelCom, which owned the majority of the equity shares but did not control the company's voting rights.

The transaction was financed by a consortium of financial investors, including Toronto's West Face Capital and California-based hedge fund Tennenbaum Capital Partners.

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U.S. private equity player Lawrence Guffey, who is an adviser to Blackstone Group and a director on the TMobile U.S. Inc. board, is also part of the deal, as are Serruya Private Equity and Novus Wireless Communications, both Canadian investors.

Prior to the deal, Mr. Lacavera controlled about two-thirds of Wind's voting shares and had a 35-per-cent economic interest in the company. Wind did not disclose the relative shares now owned by Globalive or the new investors.

VimpelCom said it sold its interest in the Canadian company to Globalive Capital for approximately $135-million and was also released from debt obligations of Wind Canada as part of the transaction. Sources said the total value of the deal was closer to $300-million, with slightly more than half of that due to the consortium of investors assuming Wind's debt.

Toronto-based Wind launched along with a pair of other wireless startups after winning cellular spectrum in the 2008 public auction and operates in major urban centres in Ontario, British Columbia and Alberta. Public Mobile was sold to Telus Corp. last year and Mobilicity has been under creditor protection since September, 2013, as it searches for a buyer.

Wind also fell short of initial projections in its business plan and faced a number of financial troubles as VimpelCom tried to sell the company for more than a year and wrote off $1.5-billion of investments in the carrier.

The company still requires additional capital to invest in its network and acquire more spectrum, and it is now approaching 800,000 subscribers.

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