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Mobilicity postpones bondholder vote

Mobilicity postpones bondholder vote

Michelle Siu/The Globe and Mail

Struggling wireless startup Mobilicity has delayed until early next month a bondholder vote on a proposed recapitalization plan.

The Vaughan, Ont.-based carrier announced Friday that its noteholders will vote on a proposed plan of arrangement that is designed to shore up its balance sheet on July 3 instead of the original date of June 25.

Mobilicity, which is legally known as Data & Audio-Visual Enterprises Holdings Inc., is pursuing the recapitalization plan as a contingency measure after Industry Minister Christian Paradis rejected a $380-million acquisition proposal by Telus Corp. this month.

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Telus later exercised an option to terminate the sale agreement, but has declined comment on whether it plans to make a second bid for Mobilicity once a federal ban on incumbents purchasing new-entrant spectrum expires next year.

In Mobilicity's case, that prohibition expires in February. Mr. Paradis is expected to outline more details about the federal government's spectrum transfer policy before the end of June.

"Moving the debtholders vote to July 3, 2013, will allow stakeholders the opportunity to review Industry Canada guidelines, regarding the transfer of wireless spectrum, prior to the vote," Mobilicity said in a release.

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