Mobilicity reportedly can’t find a buyer

Mobilicity is currently in the process of restructuring their business, plus desperately seeking a buyer to keep them alive. It was revealed a few weeks ago that rival carrier TELUS may be interested in snatching up their subscriber base and valuable spectrum, but nothing to-date has been finalized.

According to the Globe and Mail, new court documents about Mobilicity have them heavily bleeding money and scurrying to close a deal. Mobilicity has apparently embarked on “extensive marketing efforts” that has seen them reach out to “more than 30” potential buyers that range from competing carriers (Big 3 and other new entrant WIND Mobile) to international carriers, and U.S. private-equity firms, but nobody is biting.

William Aziz, President of Blue Tree Advisors II Inc., has been appointed as Mobilicity’s chief restructuring officer, and he states that “given its current financial circumstances, the Mobilicity Group needs to either reach agreement with a willing buyer for its business who can finance the operations going forward, or it needs to restructure its capital and secure additional funding in order to advance its business.” This is not too shocking and there’s a scheduled meeting with the debt holders May 21st that will decide its restructuring plan and direction.

Probably the most revealing is a peek into their financials. Apparently “for the quarter ended December 31, 2012, the cost of maintaining the Mobilicity Group’s network, paying distributors and other service partners exceeded revenue and financing proceeds by approximately $12-million prior to financing costs, or $30-million in total.”

Mobilicity has been offering their low-cost wireless service to Canadians in Vancouver, Toronto, Ottawa, Edmonton and Calgary since 2010. The company is currently valued between $350 – $400 million.

Source: Globe