Data & Audio-Visual Enterprises Holdings Inc. and its affiliates (collectively, Mobilicity) today announced that it has entered into an arrangement agreement with TELUS Corporation to provide for the sale of Mobilicity as a going concern for a purchase price of $380 million, subject to a working capital adjustment. The transaction constitutes an “Acquisition Plan” under the terms of the Interim Order of the Ontario Superior Court of Justice (Commercial List) dated Friday April 26, 2013 (the TELUS Acquisition Plan).
The transaction is scheduled to close when all necessary approvals and consents have been received and conditions to closing have been satisfied or waived. For more information, please see the joint press release of TELUS and Mobilicity issued today.
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 certain outstanding unsecured debt securities issued by Mobilicity. Upon the TELUS Acquisition Plan becoming effective, all outstanding debt securities would be deemed settled, extinguished and released and all interests of existing equity holders would be cancelled.
The TELUS Acquisition Plan provides that if first lien noteholders or certain unsecured noteholders sign a support agreement in an agreed form to support the TELUS Acquisition Plan within five days following the date of this notice (by May 21, 2013), they may be entitled to additional consideration upon the implementation of the TELUS Acquisition Plan, the amount and form of which will depend on whether they hold first lien notes or unsecured notes (other than unsecured subordinated notes).
To give effect to the Arrangement Agreement, certain revisions to the acquisition plan of arrangement described in the yellow information circular dated April 26, 2013 previously mailed to stakeholders (the Circular) have been made. The new TELUS Acquisition Plan documentation, consisting of a revised plan of arrangement, the Arrangement Agreement and a supplemental information statement to the Circular will be posted on Mobilicity’s website today.
In addition to the documents related to the TELUS Acquisition Plan, Mobilicity will also post on its website an amended Recapitalization Plan and certain related documents. Details regarding the Recapitalization Plan are described in the blue information circular dated April 26, 2013 previously mailed to stakeholders. Certain provisions of the Recapitalization Plan have been amended in accordance with the Recapitalization Plan to ensure that the transactions contemplated by the Recapitalization Plan are implemented in the most efficient manner possible. These amendments to the Recapitalization Plan are not adverse to the financial or economic interests of the security holders voting on the Recapitalization Plan. Mobilicity will pursue the alternative Recapitalization Plan only in the event that the TELUS Acquisition Plan does not proceed.
Mobilicity Meeting Postponement Details
As described in greater detail in the materials previously mailed to stakeholders, Mobilicity had called meetings of its debtholders to consider both the Recapitalization Plan and an “Acquisition Plan”. The meetings were originally scheduled for May 21, 2013. In light of the Arrangement Agreement entered into with TELUS, the meetings have been postponed until Thursday, May 23, 2013. The postponed meetings for both the Recapitalization Plan and the TELUS Acquisition Plan will be held at the offices of Norton Rose Canada LLP, Royal Bank Plaza, South Tower, 200 Bay St., Suite 3800, Toronto, Ontario M5J 2Z4, at 10:00 a.m. and 10:30 a.m. (Toronto time), respectively. The record date for entitlement to vote at the meetings in respect of both plans of arrangement will remain unchanged, being April 25, 2013. Any duly completed forms of proxy already delivered remain in full force and effect for the postponed meetings. The proxy voting deadline has been extended by Mobilicity due to the new meeting date. Proxies should be returned by no later than 10:00 a.m. (Toronto time) on May 21, 2013.