sculpin

This idea has crossed my mind as well but the size of the debt in front of these has always seemed too daunting. I don't think the Feds or the Qc govmt wants BBD to go down in the flames of a bankruptcy but after Nortel who knows. Perhaps the potential of a transport sale as mentioned earlier in the Summer in the Globe (below) could provide some breathing room for the aero side. I still wonder who put so much money into this thing by way of common equity earlier this year. Desjardins analyst Benoit Poirier figures Bombardier Transportation could be worth as much as $6.6-billion. Last month, China's two state-owned train makers merged to form the single biggest company in the sector globally by revenue. In some ways, a Bombardier-Siemens combination would be "a European answer to the huge Chinese merger," said Maria Leenen, chief executive officer of SCI Verkehr, a rail strategy and consulting firm in Hamburg, Germany.

MHY.un - Dragging on forever August 10, 2015 Data & Audio-Visual Enterprises Holdings to seek court order on how to disburse proceeds from Rogers-Mobilicity deal By Christina Pellegrini Data & Audio-Visual Enterprises Holdings Inc. will head to court Wednesday to seek an order outlining how to finally disburse the proceeds from... Data & Audio-Visual Enterprises Holdings Inc., the entity left languishing in a CCAA proceeding after the operating company, known by the brand Mobilicity, was sold to Rogers Communications Inc. in late June1, will head to court Wednesday to seek an order outlining how to finally disburse the proceeds from its sale. The company has an estimated $358 million in cash to distribute, according to documents filed August 7. It has dipped into these funds to pay ongoing routine expenditures and a $2-million balance on the debtor-in-possession loan that was repaid on July 27. Holdings also has an unpaid bill from its financial advisors in connection to their work on the Rogers sale, which will further deplete what can be recovered. In an affidavit, chief restructuring officer William Aziz states that the cash amount is "sufficient to satisfy the amounts payable" to the holders of both first- and second-lien notes, as well as any court-ordered fees, adding "there is a residual amount available to at least partially satisfy unsecured claims against Holdings." As of June 30, court filings say that first- and second-lien noteholders are owed at least $157.6 million and $59.2 million, respectively, while unsecured debt outstanding exceeds an estimated $313.5 million. Certain amounts in respect to the first- and second-lien were in dispute, per the monitor's report filed on July 14. Holdings will now ask the judge to approve a process that will require groups with any outstanding claims, excluding court-ordered charges and first- and second-lien notes, to come forward and file the necessary paperwork before Sept. 21. Aziz says "it is unlikely any material unknown claims exist" against Holdings. Since the terms of exactly how and when the funds will be distributed are still a "work-in-progress," the company is also seeking its stay period to be extended until Oct. 30. [email protected]

Update on Cline from Marret Cline Mining Update Cline has successfully emerged from the CCAA process and the Company has received new secured debentures and common equity of Cline as part of the restructuring. The Manager is actively seeking to liquidate Cline’s shares in Cline Lake Gold which the Manager believes will close in the third quarter and net somewhere between $1.0-1.25 million CAD in proceeds. The Manager is also seeking a buyer for excess land in Colorado that Cline holds, which has been valued in the USD $0.5-0.8 million range. Timing for this is uncertain and based on rural real estate markets. The coal industry remains very distressed as prices are at or near record lows with unfavourable supply, demand, and currency dynamics. Production is being shut-in and companies are entering restructuring modes, but we are likely early in the overall process. The Manager continues to opportunistically sell assets at Cline and wait for improved market conditions.

More Fortress Paper.... http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/ftp-fortress-paper/2450/ http://www.bnn.ca/Video/player.aspx?vid=661893 From Raymond James...  FTP.DB (6.5% ’16, X=$37.50, Size $40mm, YTM 30%) and FTP.DB.A (7% ’19, X=$31, Size $69mm, YTM 30%): I haven’t said this in some time but I would own these here. Both are trading on a similar YTM of about 30% but I would lean toward the ‘19 cvts as they are trading 20 points lower and as the balance sheet strengthens they should be the greater short term beneficiary of a tightening of the credit. Also, if the ‘16 cvts are restructured or refinanced in any form the ‘19 cvts will benefit as well. One of the reasons for the ‘16’s trading tighter is a view that in a bankruptcy process they will receive a greater recovery value. I’ve made a few inquiries and this does not appear to be certain. However, a case can be made for either, obviously the ‘16’s are where the companies attentions will be focused over the next 18 months. Some other key points on why to own either of these cvts here: o Landqart (Security paper business) has been progressing over the last couple years with waste rates coming down and its now having record months with a 2 year backlog currently in place  In the process of trying to improve the company’s liquidity position they were at one time looking at an inventory backed facility with a European bank which might have raised $10-20mm but they wanted land security as well so FTP had the land appraised. Now it appears there is the potential for a $100-130mm sale leaseback agreement based on the value of the land.  A sale leaseback agreement would see FTP pay 4-5mm Swiss Francs per year in rent in exchange for the upfront payment  This would certainly be a great way to surface value and reduce debt particularly given no one has ever given them this much credit for these assets  Ultimately FTP could sell the business separately if it chose to once the sale leaseback was completed  However, its not likely we’ll see anything materialize in the short term (i.e. next month) as structuring the deal will take time so something closer to the end of the year might be achievable o Thurso (Disolving pulp business) appears to be operating more consistently with longer runs between stoppages and fewer and smaller hiccups when they do occur, that being said, they’re probably due for one shortly  pricing has also been better lately and costs are coming down so overall a net positive; however,  If the Europeans start to see duties imposed on their product then pricing could get more interesting FTP shares have been running as well recently having double over the last 2 months – a healthier equity is obviously healthy for the cvts and leaves the company with more optionality. Again, this company is quietly turning the corner

http://www.theglobeandmail.com/report-on-business/mobilicity-creditors-fighting-over-funds-from-rogers-sale/article25522095/ 14th report of the Monitor ----- July 14th: http://documentcentre.eycan.com/eycm_library/Project%20mike/English/Monitor's%20Reports%20(Sixth%20and%20Eighth%20Report%20are%20located%20in%20their%20own%20sub-folders)/Fifteenth%20Report%20of%20the%20Monitor_(July%2014,%202015).pdf Mobilicity’s sale to Rogers Communications Inc. is complete, but the drama appears to continue among the small wireless carrier’s creditors as they argue over the distribution of funds from the deal. Before the $465-million deal – which Mobilicity announced three weeks ago after securing buy-in from the federal government through the transfer of a swath of spectrum licences to Wind Mobile – the company had been under court-supervised creditor protection since September, 2013. Along the bumpy road to a sale, there were several disputes involving creditors, particularly Catalyst Capital Group Inc. and the ad hoc committee of bondholders who together held most of the company’s debt. Rogers agreed to pay $440-million in cash and assume $25-million in trade liabilities. The deal closed on July 2, but new court filings show the distribution of those funds has stalled. As part of the transaction, Rogers negotiated a separate payment to Catalyst, which held first-lien bonds with a principal amount owing of $69.8-million. Rogers has now paid a total of $344.5-million – referred to as the “cash amount” – to Mobilicity’s court-appointed monitor, Ernst & Young Inc., indicating Catalyst received total proceeds of about $95.5-million. Catalyst, the Toronto-based private equity firm run by Newton Glassman, agreed to release any claim against the remaining cash Rogers paid for the transaction. Now, the remaining secured and unsecured creditors – many of which are Canadian and U.S. investment firms that typically run mutual funds – seem to be at odds about how exactly that amount will be distributed. In previous court filings in the creditor protection proceeding, Catalyst said it was concerned that certain bondholders held multiple classes of debt and that it could put them in a conflict of interest. In court filings on Tuesday, the monitor said it has not yet been able to resolve some disputes over how to pay Mobilicity’s secured and unsecured creditors. Since Mobilicity’s assets have been sold, the distribution of the proceeds is being managed by Data & Audio-Visual Enterprises Holdings Inc. (known as “Holdings” in the court documents). The terms of the sale agreement guarantee payment of the “total amounts owing” under the remaining first-lien notes (not owned by Catalyst) as well as the company’s second-lien debt and its debtor-in-possession (DIP) financing. As of June 30, that comes to a total of about $220-million. The monitor is supporting an order to pay off the DIP notes immediately (the amount owing is just under $2-million), but payment of the rest of the secured debt remains unsettled. There are disputes over a “pre-payment premium” related to the first-lien debt as well as over the amount of interest properly owing on the second-lien notes. Plus, Mobilicity’s unsecured debt totals more than $300-million, and the monitor said it has learned of new unsecured claims since the Rogers deal was announced. “A combination of practical issues and a lack of consensus on the mechanics of the distribution resulted in a decision by [Holdings] not to seek a distribution of any of the cash amount at this time, other than to the holders of the DIP notes,” Ernst & Young said in the filings on Tuesday. The monitor also said it recommends paying off a portion of the remaining first- and second-lien debt quickly, at least to help reduce ongoing interest charges, adding that it “intends to continue to facilitate discussions to this end.” Representatives of Holdings were in court on Wednesday seeking approval of the distribution of funds to pay off the DIP financing as well as the transfer of signing authority solely to Bill Aziz, who is the chief restructuring officer and only remaining officer with a day-to-day administrative role. A spokesman for Holdings declined to comment on the disputes between creditors on Wednesday.

I have tried calling Marret several times to get clarity on the NAV calc for the Mobilicity debentures and find out about return of the cash from this. Been unable to reach the extension provided to me by this Philip Oram and my last email has gone unanswered. They probably have all the cash from the secured debt positions and will probably have to wait some time for the settlement of the pro rata amounts from the unsecured Mobilicity debentures. Thus the return of capital dividend may be delayed until all of this is settled.

I spent part of the weekend going thru the Cline restructuring docs on this site. http://cfcanada.fticonsulting.com/cline/motions.htm Could be zero or it could be a huge amount just for the repayment of the debt held by Marret alone. Resource size is massive "Cline owns 100% of the New Elk Coal Mine in Trinidad, Colorado. The New Elk mine has a measured and indicated metallurgical coal resource of 618.9 million tons of in-place coal" http://www.clinemining.com/projects/coal/new-elk.html It all depends on someone actually wanting to buy a coal asset at some point in the next 2-3 years. Are we at max pessimism for coal right now? Even the oil and natural gas industries are being taken out and shot these days. Solar is in the doghouse too. So.... will the current massive drop in cap ex, due to both low oil & NG prices in the last year, throughout the world lead to shortages of both commodities sometime in the next 36 months? If so, coal may make a come back at some point in this time frame. At least at $0.61 per MHY unit we are not paying to make this bet. I would argue, too, that the Mobilicity could be worth more assuming that Marret has not yet fully accounted for the payment on the unsecured PIK debentures. I have no certainty on this however. Why has Marret not written Cline down more significantly in the current environment??

The NAV of the MHY.UN is now being listed as $1.44 as of July 2. No further details have been released. http://marret.ca/marret-high-yield-strategies-fund.html#NAV

Z:SUNE - SUNEDISON INC Why is a $8B utility a multibagger spec idea? Elaborate if you can. Thx

Why? Already doubled in last 12 months. $8 billion cap now?

Mobilicity gets approval to disburse funds from Rogers deal to creditors CHRISTINE DOBBY - TELECOM REPORTER The Globe and Mail Published Monday, Jun. 29, 2015 6:08PM EDT Last updated Monday, Jun. 29, 2015 6:11PM EDT A judge has approved the distribution of funds in Mobilicity’s restructuring proceedings after the small wireless carrier struck a $465-million deal to sell itself to Rogers Communications Inc. The court’s order Monday was necessary for the companies to proceed on closing the deal, which they announced last week and which already has approval from the federal government and faces no opposition from the Competition Bureau. A group of Mobilicity’s creditors – including its bondholders as well as suppliers including customer-support provider Amdocs, network manager Ericsson Canada Inc. and landlords for its cellular sites – consented to a “vesting” order the company put forth to Ontario Superior Court of Justice judge Frank Newbould. The order, which the judge signed Monday afternoon, will allow Rogers to assume Mobilicity’s assets free and clear of any claims against them apart from the small carrier’s trade liabilities, which Rogers has agreed to assume. The purchase price of the deal is $440-million and Rogers has agreed to assume $25-million in net negative working capital, according to a spokesman for Mobilicity. The order will see Rogers transfer a portion of the purchase funds as a loan to repay Mobilicity’s first lien, second lien and debtor-in-possession (or DIP) financing. These creditors will fully recover the principal they advanced as well as accrued interest and penalties. However, Mobilicity’s total debt stands at about $600-million, according to court filings, and the balance of the funds from the purchase will be distributed to the company’s unsecured creditors on a pro rata basis. Toronto-based private equity firm Catalyst Capital Group Inc., one of Mobilicity’s biggest individual bondholders, was often at odds with Mobilicity’s other bondholders throughout the restructuring process. Even before Mobilicity filed for protection under the Companies’ Creditors Arrangement Act in September, 2013, Catalyst had already launched a lawsuit against the company for raising a round of financing without Catalyst’s participation. The firm struck a separate, confidential agreement with Rogers as part of the overall transaction. There was some delay Monday morning as lawyers for various creditors negotiated last-minute changes to the vesting order. One change to the final order, for example, will give landlords at Mobilicity’s cellular sites – which are often found on building rooftops – 30 days to object to the transfer of their lease agreements to Rogers. Otherwise, the events of the past week have brought the company’s restructuring to a rapid conclusion after a drawn-out process that at times saw stakeholders frustrated with what they saw as a change in government policy, as Ottawa blocked multiple attempts to sell to Telus Corp. Although investors in the wireless industry initially believed they would be able to sell spectrum reserved for new entrants in a 2008 auction to one of the Big Three carriers after five years, Ottawa introduced a new spectrum transfer framework in 2013 and indicated it would not permit deals that increased the concentration of the airwaves used to build wireless networks in the hands of the incumbents. The federal government ultimately approved last week’s deal with Rogers – along with a separate agreement Rogers made in early 2013 to purchase unused spectrum licences from Shaw Communications Inc. for a total of $350-million – in part because the transactions also include the transfer of spectrum licences to Wind Mobile Corp., the last remaining new entrant offering service in Ontario, British Columbia and Alberta.

You had some great ideas here. I missed MHY by a few days but may still bite at that to grab the last part. Did you have any estimate for recovery on the debentures in MMF? What is the easiest way to get a disclosure of all of the holdings of a Canadian fund like MMF? This is what I believe to be the holdings by MMF.un... 625,000 Data & Audio Visual Enterprises Wireless Inc., Callable, 9.500%, 2018/04/29 427,703 Data & Audio-Visual Enterprises Holdings Inc., 15.500%, 2014/06/30 1,369,038 Data & Audio-Visual Enterprises Holdings Inc., Pay-In-Kind, Callable, 15.000%, 2018/09/25 My WAG for this fund is $2.1MM in recoveries from DAVE debentures/notes. Remember I am using incomplete information and am not privy to additional costs etc that may lower this estimate. Per share this is $0.63 of which $0.42 is from the secured debt. http://www.marret.com/

Yada Below is the amount of Cline they own. I'm sure this doesn't include the accrued interest. This may change as they (Marret) is restructuring Cline to cut costs and simplify the structure. I believe that Marret owns most of the debt on Cline so they drive the bus in terms of restructuring, negotiating any deals etc. Given how depressed the coal market is today (ongoing shuttering of coal power plants, weak met coal demand, over supply of both met & thermal) my only hope is that some entity comes in and pays them 10 - 20% on their debt to take these properties over. Here too, I am very disappointed in the management of Marret in that they have not written down the value of their Cline holdings materially. This seems nonsensical in the current enviroment. If you are interested, there is another play on these busted Marret funds evolving right now. This is the Marret Resource Corp (MAR on the TSX) which is liquidating all of their investments other than $8mm in cash and of course the holding in Cline (they have no Mobilicity). $3,421,854 Cline Mining Corp., Convertible, Restricted, 10.000%, 2014/06/15 2,395,298 2,395,298 $35,297,000 Cline Mining Corp., Restricted, 10.000%, 2014/06/15 (USD) 26,926,670 26,926,669

Rukawa --- Been following Cdn small caps for 20+ years - get to know what is out there. Disappointed that Marret has not put out a press release as they said they would a few days ago. My guess is that they are under no obligation to until there is more clarity on the amounts the unsecured creditors will receive. At the same time, they could have alerted the market to the potential value but did not so they have had many of their longer term unit holders sell out at bargain prices while those who did the work scooped up these shares. As well, I'm sure that there is a great likelihood that friends and family of certain senior mgmt were given indications of how good a deal the MHY.un shares were in the $0.20's - $0.50's. I refined my valuation and now believe they will get $15.5MM from principle & accrued interest on the secured debt and $13.9 mm from the $21MM of Pik bonds. So this is $0.42 from secured and $0.37 from the PIK bonds for total of $0.79/unit from Mobilicity. Cline debt is free below this number. Remember this is just an estimate as there are moving parts & uncertainties (unknown costs etc) that I am not privy to so my final number could be off (and maybe substantially). GLTA

It appears that the Mobilicity deal now has Competition Bureau approval as well as stated in the following Globe article tonight. So the only loser here is Telus and given all of the checkmarks (Court, Regulatory & Competition Bureau) it does not seem very likely the deal can now be rescinded. Congrats to all who bought into this. First time I think I have had a position go up by 212% in one day. Hoping to see Marret clarify the potential NAV impact in a press release tomorrow. Rogers said Wednesday evening that it has now received all necessary approvals for the transactions, including the green light from the Competition Bureau. June 24, 2015 Mobilicity deal positions Wind to compete with wireless Big Three By CHRISTINE DOBBY Small wireless player was pivotal in 'remarkable' $465-million deal for carrier that had been in creditor protection Startup wireless carrier Wind Mobile Corp. has emerged as a key winner in a deal between Rogers Communications Inc. and Mobilicity that awards Wind the cellular airwaves it needs to expand and improve its network at no cost. The Toronto-based carrier was pivotal in the $465-million deal no one in the Canadian wireless industry thought could get done. As part of a series of spectrum licence transfers from both fellow new entrant Mobilicity and Shaw Communications Inc., all of which Industry Canada has now approved, Wind now has more of the resources it needs to compete against the Big Three wireless players. Wind paid a bargain-basement price for a significant chunk of licences in a spectrum auction in March, but it cannot yet deploy service with those airwaves because the necessary ecosystem of mobile devices for that frequency band does not yet exist. The airwaves it will get through the Rogers transactions – which are in the same frequency band Wind bought in 2008 and built its original network with – will allow it to start building an LTE (long-term evolution or fourth-generation) network immediately. "This is a remarkable transaction," Orestes Pasparakis, a lawyer for Mobilicity, told the Ontario Superior Court judge who approved the deal Wednesday morning, apparently still somewhat amazed himself as he recalled the company's frustration with government policy on the path to finally getting the deal done. Others like it had been floated before – Rogers courted Wind Mobile at one point and Telus Corp. repeatedly offered to buy Mobilicity – but as the federal government's fourth-carrier policy for the industry hardened in the summer of 2013, it became clear that Ottawa would not bless a tie-up between one of Canada's dominant three carriers and its struggling new entrant players. The Rogers proposal allowed the government to finally approve a deal for long-floundering Mobilicity, give Wind another spectrum boost and a quick path to LTE and, at the same time, address the sticky issue of what to do with an option agreement Rogers struck in early 2013 to buy unused spectrum from Shaw. Rogers said Wednesday it will pay a further $100-million to Shaw for the licences. The fact that the transactions cleaned up so many outstanding issues and offered more help to Wind is believed to have been central to the federal government's willingness to approve the deal over one with Telus that did not offer as much of a benefit to Wind and left the Shaw spectrum stranded. "Wind played a key role at the table, but Rogers brought the cheque book," said a source close to the negotiations. Talks heated up over the past two weeks, with a flurry of offers and counteroffers, and Rogers had a team of 20 people in Ottawa and Toronto working on the transaction. Sources said Telus offered to pay more, but Mobilicity's stakeholders were more confident they could win government approval of the Rogers deal. After more than two years of attempts to win Mobilicity's spectrum, Telus executives are said to be disappointed with the outcome and weighing a legal challenge of some sort. Telus did not reply to a request for comment Wednesday. Bill Aziz, chief restructuring officer for Mobilicity, which has been under creditor protection since September, 2013, said he would not discuss the bid process publicly, but added, "We went with the deal that was the highest price and the most executable." "Everybody's a winner today except Telus, unfortunately," Alek Krstajic, chief executive officer of Wind, said. "Mobilicity wins, Shaw wins and Rogers wins. But most importantly, the big win is for Canadian consumers due to the government policy." "Our government has one goal: to take deliberate, concrete steps to create more choice, lower prices and better wireless service for Canadians and their families. Today's approval of these licence transfers delivers on this objective," Industry Minister James Moore said in a statement. Rogers will continue to offer service for Mobilicity's 157,000 customers, transitioning them over to its network. Spokesman Aaron Lazarus said Rogers has not yet determined whether it will retain the brand as a discount wireless offering. Mr. Krstajic said Wind also negotiated an option that allows it to opt to pay Rogers $25-million in exchange for half of Mobilicity's cell sites and equipment. Finally, it gains new licences for spectrum in Manitoba and Saskatchewan, which he said the company would consider selling to MTS Inc. or SaskTel, respectively. Although Wind walks away happy, it ironically managed to facilitate a deal that saw its one-time rival Mobilicity sell for far more than Wind itself was able to attract last fall, when a consortium of investors bought it for $300-million. Of course, in that case, a sale to one of the Big Three was not seen as an option. Meanwhile, Rogers gains new chunks of contiguous spectrum – which means the frequencies are right next to each other, allowing it to offer more speed and capacity – and will be able to use Mobilicity's losses to reduce its tax bill by $175-million. Scotia Capital Inc. analyst Jeff Fan called the transactions, "Probably the best strategic move Rogers CEO [Guy Laurence] has made since joining the company." Shaw said in a statement Wednesday it made a total of $350-million selling its spectrum licences to Rogers after originally purchasing them for $190-million in 2008. Rogers paid $50-million to Shaw for the option plus a $200-million refundable deposit, which, given the government's policy on transfers to incumbents, many had assumed Shaw would eventually have to return. The fact that the option was successfully exercised after all and Rogers paid the extra $100-million gives Shaw a nice boost to its balance sheet. Rogers said Wednesday evening that it has now received all necessary approvals for the transactions, including the green light from the Competition Bureau.

Yes that looks about right but with all of the accrued interest on those pik's and the 1st/2nd lien notes the amount accruing to the MHY.UN may be higher than the amount shown on the portfolio updates (I assume they have not included accrued interest in these filings). I contacted Marret and they will issue a press release about this either later today or tomorrow. Another great thing about this situation is the cash extracted from the Mobilicity debt should be returned to the MHY.Un shareholders as a non taxable return of capital.

For those of you who own MHY.UN on the TSX... Mobilicity seeks court’s OK for $465-million takeover offer from Rogers Mobilicity has accepted an offer from Rogers Communications Inc. and plans to seek court approval of the $465-million sale. The small wireless carrier, which has been under creditor protection since September, 2013, will take the agreement to court Wednesday morning, according to a court filing. The Globe and Mail reported Tuesday evening that sources familiar with the negotiations said the company had accepted the agreement after weighing competing bids from Rogers and Telus Corp. The filing, which was posted on the website of the monitor in its restructuring process overnight, confirms that Mobilicity accepted a bid from Rogers and is asking the court to approve the deal on Wednesday. Bill Aziz, Mobilicity’s chief restructuring officer, said in an affidavit that he understands the agreement has the support of “substantially all of [Mobilicity’s] secured debt holders.” The filing said services for Mobilicity subscribers will continue uninterrupted. The carrier offers discount wireless services and has customers in Toronto, Ottawa, Calgary, Edmonton and Vancouver. The company’s main asset is its spectrum – the airwaves used to build cellular networks – which it purchased for $243-million in 2008. The federal government must approve transfers of spectrum and has previously blocked Mobilicity’s attempts to sell its licences to Telus, one of Canada’s three largest wireless carriers. Telus offered $380-million in its original 2013 deal and $350-million in a deal last year. But Ottawa’s policy on the wireless industry has been aimed at encouraging a fourth carrier in every region to give consumers an alternative to the Big Three and the government has said it would not approve deals that resulted in an undue concentration of airwaves in the hands of Canada’s dominant players. Yet, the landscape has shifted thanks to recent policy changes allowing for more spectrum to be put to mobile use, as well as three public auctions in little more than a year plus the 2008 auction that first reserved airwaves for new entrants. While Canada’s dominant carriers together held 98 per cent of available mobile spectrum in 2006, Industry Minister James Moore has said he expects new players to control 25 per cent by this summer. Wind Mobile Corp. has also emerged as a more viable competitor in recent months, with new ownership, a new CEO and a swath of new airwaves it purchased for a low price. Mr. Aziz stated in the affidavit, “It is my understanding, given recent developments in the Canadian wireless industry and specifically recent auctions of spectrum, that Industry Canada no longer has the same concerns it once did about ‘undue spectrum concentration’ among certain wireless carriers in Canada.” Sources say the deal include the transfer of some cellular spectrum to Wind, which is believed to be a factor in the federal government’s willingness to approve a transaction at this time. Telus, which has been pursuing Mobilicity for more than two years, is said to have offered more than Rogers, according to one source, and could seek to challenge the deal in court. However, Mobilicity’s creditors felt the Rogers deal was more likely to be approved by the federal government. Sources familiar with the negotiations said the Rogers deal would also see the company complete an option to purchase unused spectrum licences from Shaw Communications Inc. Rogers and Shaw struck a broader deal that included the option in 2013 but have to date been unable to win government approval for the spectrum transfer. According to one source, Rogers is under pressure to get approval for that option as it is set to expire soon. Mr. Aziz said Mobilicity has been in continuous discussions with potential buyers, including Rogers, for the past two weeks, a process that included multiple offers and counter-offers. He said the company was aware that Rogers needed to conclude a transaction by Wednesday, June 24 due to “other related dealings it had.” Mobilicity therefore asked its suitors to provide their last and final offers by 10:30 p.m. Monday. Stakeholders considered the options into the night, held further discussions with the bidders and finally, the company’s board approved the Rogers deal on Tuesday. Mr. Aziz said the carrier has outstanding secured and unsecured debt totalling approximately $600-million, including accrued interest and financing costs. The company’s original equity investors also invested approximately $250-million. Funds from the proposed sale will be used to fully repay the company’s secured debt and repay its unsecured creditors on a pro rata basis. However, a portion of Mobilicity’s first lien bonds, which are held by Catalyst Capital Group Inc., will remain outstanding, Mr. Aziz said. The motion materials include an agreement between the company and Catalyst that was struck on Tuesday and filed with the court in confidence. Rogers will assume Mobilicity’s outstanding debts to its trade creditors — such as suppliers and landlords – as well as its obligations to employees and dealers. Representatives for Mobilicity, Rogers and Telus all declined to comment on the developments Tuesday evening before the court filing. Mobilicity had 157,000 subscribers as of the end of April. In addition to its spectrum licences, it is also valuable to Rogers for its tax losses, which stood at $567-million as of the end of 2013. Mobilicity will first seek the approval of the Ontario Superior Court judge who has been presiding over its creditor protection proceedings under the Companies’ Creditors Arrangement Act. It is then expected to seek approval from Industry Canada.

For anyone who has put some casino money in the Marrett High Yield Fund (MHY.UN) (there is also another play on this too – MMF.UN) there are some encouraging signs that there may be some recovery from the Data & Audio Visual Enterprises debentures that MHY holds. Hopefully, an acquisition is allowed to take place by the Feds. I am not sure what the potential recovery could be at this stage but the Fund had $31,842,000 in DaVE bonds in its portfolio on Dec 31/2014 with 36.7 million shares outstanding – so the upside could be substantial. GLTA…. Canada’s Rogers, Telus Said to Compete to Acquire Mobilicity Rogers Communications Inc. and Telus Corp. are vying to acquire Mobilicity, the Canadian wireless carrier currently in creditor protection, people familiar with the matter said. The companies have made preliminary proposals to the federal government valuing Mobilicity at a minimum of C$300 million ($245 million), said the people, who asked not be identified because the information is confidential. No formal deal has yet been submitted to the government and talks between Rogers, Telus and Mobilicity’s creditors could still fall apart, the people said. Any deal that is reached would need to be approved by the federal government and the bankruptcy courts. Vancouver-based Telus is interested in Mobilicity, and is prepared to transfer some cellular airwaves to wireless operator Wind Mobile or to another new entrant, spokesman Shawn Hall said. Allowing Rogers or Telus, two of Canada’s three biggest wireless carriers, to acquire Mobilicity would reverse previous government decisions to reject takeover attempts by Telus on the grounds that it would limit competition. Canada has been working for six years to encourage the creation of a fourth national carrier to bring down prices for wireless services. Canada “will not approve any spectrum transfer request that decreases competition in the wireless sector,” Jake Enwright, a spokesman for Canadian Industry Minister James Moore, said Saturday in an e-mailed statement. Moore announced Friday he would not run in the next federal election in October due to family reasons. Once firm bids have been received, the federal government could move quickly in approving or rejecting a transaction, the people said. “We continue to be interested in acquiring Mobilicity,” Hall, the Telus spokesman, said Saturday in an e-mail. Previous Attempts Canada’s government has blocked multiple earlier attempts by Telus to buy Mobilicity’s assets. In April 2014, Mobilicity said it had reached an agreement to be acquired by Telus for about C$350 million. Aaron Lazarus, a spokesman for Rogers, declined to comment on whether the carrier had submitted a proposal to buy Mobilicity or transfer spectrum after a potential acquisition. Mobilicity continues to “pursue a going-concern transaction that is in the best interest of stakeholders and we continue to engage with a number of parties,” Joel Shaffer, a spokesman for the carrier, said in an e-mail Saturday. “We can’t comment on the specifics of any potential transaction or the actions of others.” Mobilicity is the brand name of Data & Audio Visual Enterprises Wireless Inc., while Wind is the brand name of closely held Globalive Wireless Management Corp. The Globe and Mail reported late Friday that Rogers and Telus were in the running to buy Mobilicity.

I currently own a Canadian public company with 14.3 million shares outstanding. Currently this Company has 1.7 million options issued and outstanding which is about 12% of the number of shares outstanding. I have always thought that 10% should be the maximum percentage that options should be of the shares outstanding. Now to my disbelief the Company has issued in its circular a change to the corporations stock option plan which would allow it increase the number of new options that it can issue by 2.1 million - another 15.2% as a percentage of the outstanding shares. Combined with the options already issued and the new options which could be issued, the Company could end up issuing over 27% of the shares out in the form of options. Has anyone seen such a large percentage of options in a public Company in either the US or Canada? Has anyone had success defeating such a motion or has there been any legal fight that has been successful in such a case? The Company is International Road Dynamics on the Toronto Stock Exchange and has a market cap about $14 million and sales revenue of $45 million & currently profitable. Thx

Great post, Cardboard

In the oil market, you can’t have it both ways By Steven Kopits | December 10, 2014 01:14 PM The media is replete with stories of low oil prices killing the shale revolution. This is not going to happen, and here’s why: the world remains dependent on US shale oil production growth. We at Princeton Energy estimate that oil demand should grow at around 1.6 million b/d per year at $80/b, on a Brent basis, with that demand improvement becoming evident from the second half of 2015. Now, where would supply growth come from to meet that demand? It could come from Brazil and Iraq for starters. Brazil’s offshore program is finally finding its legs, and production has been increasing at a pace of perhaps 200,000 b/d per year. Iraq, assuming it does not implode into civil war, could provide as much with some luck. And perhaps another 200,000 b/d could come from various other sources, for example, from the US Gulf of Mexico in 2015. And that’s about it for conventional production growth. As a practical matter, since 2005, about 90% of total supply growth has come from North American unconventionals, including Canadian oil sands and US shale oil and natural gas liquids, with US unconventionals providing about three-quarters of North American supply growth overall. If this were to fall to zero, then all other sources could provide only, say, an increment of only 600,000 b/d, about 1 million barrels per day short of our projected demand growth. Therefore, if shale growth were to fall to zero, then the global economy would be facing a material shortage of oil by the second half of next year, with high prices the result. More likely, however, low prices will only trim the growth of US unconventionals, reducing the increase to “only” 1 million barrels per day by early 2016, of which US shale growth would represent around 800,000 b/d. Growth of 800,000 b/d per year is phenomenal, paltry only in comparison to the 1.6 million barrel per day pace seen in the US in the last six months. Thus, the equilibrium needed is not the collapse of US shale oil production, but the deceleration of its growth to about half of recently observed and frankly stratospheric levels. And of course, all this assumes no conventional production is likely to roll off due to low oil prices. I have argued elsewhere that high oil prices have been sustaining more conventional production than unconventional production, and low oil prices could see conventional production to fall well in excess of one million barrels per day by the end of next year. But even if we assume that low prices will have no effect on conventional production, the world will still need pretty smart US shale oil production growth. Of course, the return of Libyan (and possibly Iranian) production will depress prices for a while. Indeed, Libya has been adding barrels over the last six months at the pace of unconventional growth—no wonder prices have tanked. But this process cannot continue indefinitely. Even if Libya brought production fully back on line, the effect would be fading by the second half of 2015. The easing of supply outages affects timing of production, but does not change the fundamentals over the longer term. So you can’t have it both ways. If low prices crush US unconventionals, then production growth will be inadequate, oil prices will pop right back up. On the other hand, US unconventional growth could remain strong by any reasonable measure, even if reduced from its recent torrid pace—but then oil prices have to stay high enough to stimulate this production. So let’s not fret too much about the US shale business. The global economy remains highly dependent on its growth, and that’s not going to change. Within a few months, the market will provide the prices necessary to support the growth of North American unconventionals.

The Ebola crisis and APT BENJ GALLANDER and BEN STADELMANN Friday, December 5, 2014 Back in June 2012, we wrote about Alpha Pro Tech (APT), at that point a rather sleepy maker of disposable protective gear such as gowns, shoes and bouffant caps primarily for hospitals. A second division makes weatherization products for buildings. On a big day, the volume for the company would chug over 100,000 shares, but mostly it would trade far below that level. How off-the-radar was this outfit? When Benj went to the AGM, except for management and their wives, he was the only person to show up. Talk about having a private audience with the big cheeses! The enterprise had been acquired a number of months before for the President’s Portfolio at the lowly price of $1.17, with an initial sell target of $3.34. The thinking was that this stock would jump when a pandemic scare was in the air, such as occurred with SARS and H1N1. When that would happen was unknown, that it would ensue at some point was pretty much a lock. When this disease struck and became front page news, the stock price went ballistic. On the last day of September, 58 per cent of the position was sold at $3.34 and the company traded almost three million shares. The float is only 14.9 million. But that was simply the opening act. Ten days later, the second sale was at $6.96, with trading volume almost reaching an outlandish 39 million shares. The following day traded better than 38 million shares and the peak was reached the day after when almost 43 million shares turned over, almost three times the float! The stock price reached its summit at $10.73 but unfortunately the remaining 21 per cent of our original position was not offed. The thinking was that perhaps $11 and change was obtainable, but it was not to be. After the frenzy, the stock price plunged, touching a low of $2.66 on November 24. It has rebounded since then to around $3 – a far cry from the earlier heights but still a healthy gain from the original purchase price. So where does it go from here? Revenues and income continued the upward trend in the most recent quarter and those results were before the Ebola scare took off. There is no debt. The share count has dropped from north of 22 million in 2009 to less than 19 million due to a share buyback. On the negative side, insiders have been selling, but they still own better than 16 per cent of the corporation. The business announced a “substantial increase” in October orders. In all likelihood, November will be even better. That bodes well for the next quarterly numbers, to be reported towards the end of January. It would not surprise us if the stock price jumps in anticipation of better results. Naturally, if Ebola becomes front page news again that could propel the stock price back up further and faster.

From Canaccord... • Sector rotation -- Tighten up subsector bets. o Overvalued groups keep getting pricier and undervalued groups cheaper.  Relative valuation of resource cyclicals has fallen below the Great Recession lows (fall of 2008).  It is also approaching the lows seen at the height of the technology bubble (spring 2000). o A mean-reversal in sector valuation is long overdue. We stay indifferent between resource and non-resource cyclicals relative to defensives.

Marret has the first lien debt so the process to extract value is in their hands. That said, the potential value to be received is dependent on what someone else will pay. In the current environment they state they have not received reasonable bids but with the current cash position they can wait for coal markets to improve. Below is Marret discussion from last Fall where they state... "Marret’s internal valuation of Cline’s assets in a distressed scenario, such as a sale under CCAA, supports the current face value of the debt outstanding.  An independent report from an advisor to Marret on the late 2012 proposed restructuring provided a valuation range of par to considerably higher than par using various valuation methods. It should be noted, we have not relied on this in a material way, other than to provide support for our internal valuation. " Whether this is true now in a much more depressed market is doubtful however the the current trading price of MHY.un is already factoring little recovery (<10% of face?). Here is the link to that quote from above.... http://marret.ca/pdf/MHYSF-PR-131031.pdf

With respect to MHY.UN's position in Mobility thru Data & Audio Visual, the holdings are listed below. The 2018 9.55 listed at small discount to face, the 15.5% at 50% of face value and the $21MM of the Payment in Kind are given no value in the lastest NAV calc. Face Value Instrument 1,451,000 Data & Audio Visual Enterprises Wireless Inc., Callable, 9.500%, 2018/04/29 1,414,725 1,416,539 875,000 Data & Audio Visual Enterprises Wireless Inc., Callable, 9.500%, 2018/04/29 853,125 854,219 8,529,857 Data & Audio-Visual Enterprises Holdings Inc., 15.500%, 2014/06/30 4,264,928 4,264,928 20,987,222 Data & Audio-Visual Enterprises Holdings Inc., PIK, Callable, 15.000%, 2018/09/25 - - Below is today's Globe article on Mobilicity.. http://www.theglobeandmail.com/report-on-business/mobilicity-weighing-paths-out-of-limbo/article21782060/ Perhaps a catalyst... Mobilicity says it is in ongoing, early-stage discussions with “a number” of interested parties over a possible transaction that could end the restructuring limbo the wireless startup has been in for more than a year. Although Mobilicity is deep in debt – it had long-term debt of $415-million (Canadian) and total liabilities of $510-million as of March 31 – it is now operating on a “cash flow break-even basis,” according to this week’s court filings, which also note its customer base is stable and sat at 154,914 as of Oct. 31. It will ask the court on Thursday to grant an eighth extension of the stay period shielding it from legal action by creditors to Jan. 30 from Dec. 1. Another article about Catalyst Capital involvement... http://www.androidheadlines.com/2014/11/catalyst-capital-group-willing-back-mobilicitys-bid-spectrum.html?utm_source=dlvr.it&utm_medium=twitter