Mobilicity has reportedly secured the necessary financing for participation in this year’s AWS-3 spectrum auction. Last week, the company requested another stay from creditors and asked to extend its protection for four more months, until May 8th. Mobilicity was looking for the money to participate in the AWS-3 auction and only had until January 30th, which is this Friday, to secure funding.
Now, just a few days later, The Globe and Mail is reporting that Mobilicity now has enough money to register for the auction. The company enter into a second debtor-in-possession financing agreement with some of its existing debt holders. According to The Globe, the new $65 million agreement is structured off an earlier financing agreement valued at $30 million, the one Mobilicity entered into when it first filed for protection nearly a year and a half ago.
Mobilicity will now be competing with WIND Mobile for spectrum in the AWS-3 auction, where WIND was previously the only qualifying participant for the set-aside spectrum in lucrative regions like Southern Ontario, Alberta and British Columbia. WIND has already made an aggressive play for Mobilicity’s customers, first offering a $60 credit for Mobilicity customers making the switch and then, just a week ago, announcing six months of free service on its $35 plan plus a free SIM card for new subscribers jumping ship from Mobilicity.
For months there’s been speculation about WIND acquiring Mobilicity, and there was even talk that these recent offers from WIND were an attempt to bankrupt Mobilicity to make it an easier acquisition target. The fact that Mobilicity may be going up against WIND in the spectrum auction after all will likely do nothing to change people’s minds on the possibility of a WIND acquisition. After all, even if Mobilicity does secure some spectrum, its debt is bigger than ever now.
Mobilicity submitted this new funding agreement for court approval on Monday. The court should offer an answer by Wednesday.
[source]The Globe and Mail[/source]
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