Mobilicity Starts Restructuring Process

^[1]Data & Audio-Visual Enterprises Holdings Inc. and its affiliates (collectively, “Mobilicity ^[1]“) has obtained two orders of the Ontario Superior Court of Justice (Commercial List) authorizing Mobilicity to, among other things, call and hold meetings at which two arrangements will be voted on by debt holders pursuant to the Canada Business Corporations Act. Each of the meetings of security holders is scheduled to be held on May 21, 2013. The record date for entitlement to vote at the meetings is April 25, 2013.

The relevant stakeholders entitled to vote at the meetings will be asked to approve both a recapitalization 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 recapitalization plan would be engaged.

The sale plan provides a 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 recapitalization plan, the share capital of Data & Audio-Visual Enterprises Holdings Inc. would be reorganized, 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.