Mobilicity Secures Funding for AWS-3 Spectrum Auction

by Istvan Fekete on January 28, 2015

Struggling wireless startup Mobilicity has managed to secure funding to participate in the upcoming auction for AWS-3 spectrum, just a few days before the final deadline for registration.

Last week the carrier filed materials with the Ontario Superior Court of Justice asking for a creditor protection extension until May 8, as it is in talks with old and new debtors to secure the funding necessary to allow it to place a deposit of about $62.5 million on Friday.

The financing arrived at the final moment, just in time for Mobilicity. Last Thursday the carrier said it still lacked the necessary funds, but chief restructuring officer William Aziz the said on Monday that the company had reached an agreement to enter into a second debtor-in-possession (DIP) financing for $65 million from some of the company’s existing debt holders.

The funding is pending court approval, which the carrier is seeking at a motion in Toronto scheduled for today. Also, it is noteworthy that the company plans to create a wholly new subsidiary called Mobilicity SpectrumCo for the sole purpose of applying for wireless airwaves.

At this moment there is no public information about how the secured creditors of Mobilicity will be affected by the new financing. One of them is Catalyst Capital Group, which owns 30% of the wireless startup’s senior debt, but it is reportedly missing from the original DIP financing.

Back in November, Catalyst chairman Newton Glassman expressed the fund’s willingness to back Mobilicity’s spectrum purchase dream, simply because this appears to be the only solution to find the right buyer at the right price. Mobilicity has been under creditor protection since September 2013.

Since Mobilicity and Wind Mobile are the only two companies that can bid for the set-aside AWS-3 spectrum licences in Ontario, British Columbia, and Alberta, the $62.5 million funding could secure the carrier all of the available spectrum if Wind decides to skip this auction because of other plans such as a merger with Mobilicity.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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