Mobilicity announces C$380 million going-concern sale to Telus

By Caroline Salls

Pittsburgh, May 16 - Data & Audio-Visual Enterprises Holdings Inc. and its affiliates (Mobilicity) entered into an arrangement with Telus Corp. under which Mobilicity will be sold as a going concern for C$380 million, subject to a working capital adjustment, according to a news release.

Mobilicity said the transaction constitutes an "acquisition plan" under an interim order of the Ontario Superior Court of Justice and is scheduled to close when all necessary approvals and consents have been received and conditions to closing have been satisfied or waived.

The company said the purchase price would be used to repay all of its outstanding first-lien and second-lien debt, with the remainder being used to repay some outstanding unsecured debt securities.

When the acquisition plan takes effect, all outstanding debt securities would be deemed settled, extinguished and released, and all interests of existing equityholders would be cancelled, the release said.

Under the acquisition plan, if first-lien noteholders or specified unsecured noteholders sign a support agreement by May 21, they may be entitled to additional consideration, the amount and form of which will depend on whether they hold first-lien notes or unsecured notes, other than unsecured subordinated notes.

In connection with the arrangement, Mobilicity has made revisions to the acquisition plan of arrangement announced on April 26.

In addition, debtholder meetings scheduled for May 21 have been postponed to May 23. The record date for voting on the acquisition plan and an alternative recapitalization plan is still April 25.

Mobilicity said it would move forward with the alternative recapitalization plan only if the Telus acquisition plan does not proceed.

Under the proposed recapitalization plan, the share capital of Data & Audio-Visual Enterprises Holdings would be reorganized, some existing second-lien notes would be repaid, and Mobilicity would receive additional liquidity to enable it to continue as a going concern.

Mobilicity is a Toronto-based wireless carrier.

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