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Courts Grant Mobilicity Their Extension Until December 1

September 29, 2014 - Written By Cory McNutt

 

A little over a week ago we reported that Mobilicity asked the courts for further protection from its creditors as the September 26 deadline was fast approaching – they asked for an extension until December 1 to give them time to explore their options…and they were granted their request.  This is the seventh extension asked for and received and one has to wonder just how long the Canadian Government and courts will allow Mobilicity to ‘hang on’ and help keep their creditors at bay.  This has to be especially frustrating for the creditors who have watched lucrative offers from WIND Mobile forbidden by the Government in its quest to create a ‘fourth’ BIG carrier to compete with the likes of Rogers, Bell and TELUS.

The courts have found that since their previous report that “Mobilicity’s operations have continued in the ordinary course and without interruption.  The Applicants [Mobilicity] continue to receive the services they require from all of their major suppliers and payment arrangements that were previously negotiated continue uninterrupted.”  As long as the court is happy with the status quo, they may continue to grant further extensions, especially because it appears that Mobilicity is actually operating with a positive cash flow without the need for additional funding. Mobilicity reported that the “actual cash flow for the thirteen-week period ended September 12th, 2014 was approximately $4.24 million higher than projected in the June 2014 Cash Flow Statement due to $2.23 million positive variants in receipts and $2.01 million positive variants in disbursements.”

Mobilicity is also reporting to still have 156,300 active subscribers as of August 31, 2014, although they are only offering the prepaid, month-to-month service…there are no contracts being offered to new customers.  Customers that were already on contract are being given the same discount pricing of their original plan as they switched over to a month-to-month plan.  The 156,300 subscribers is actually an increase of 1,500 more subscribers than when Mobilicity last reported to the courts, their overall numbers, however, are down by 20,000 subscribers since December 2013…a natural reaction with news of their financial problems.

Mobilicity will continue to monitor their options and will review and consider their restructuring alternatives – they claim to have several options available to them.  As long as they continue to meet the requirements required of them by the courts, this may continue to drag out for quite a while.  Please give us a holler on our Google+ Page and let us know if you are still a Mobilicity subscriber or have you already jumped ship…as always, we would love to hear from you.