Canadian mobile operator Mobilicity has obtained court orders authorising a restructuring of its debts. Data & Audio-Visual Enterprises Holdings and its affiliates, the operator's holding company, obtained the orders from the Ontario Superior Court of Justice (Commercial List) to call meetings at which two arrangements will be voted on by debtholders. Scheduled for 21 May, the meetings will see stakeholders entitled to vote on a recapitalisation plan and a sale plan.
These two plans are mutually exclusive, though both plans are being pursued in parallel so that one of the two plans can be implemented on an expedited timeline. If both plans are approved and the sale plan cannot be completed on the terms contemplated, then the recapitalisation plan would be engaged. The sale plan provides as structure for an as yet to be determined purchaser to acquire all of the outstanding shares of Mobilicity. The purchase price received would be applied to repay all of the outstanding first and second lien debt of Mobilicity, with the remainder being used to repay outstanding unsecured debt securities issued by Mobilicity.
Under the proposed recapitalisation plan, the share capital of Data & Audio-Visual Enterprises Holdings would be recognised, certain existing second lien notes would be repaid and Mobilicity would receive additional liquidity to enable it to continue as a going concern, continuing to service its existing subscribers and dealers in its coverage areas.
