Globalive Wireless Revamps Shareholder Structure Following Concerns over Ownership

­The increasingly controversial finances behind Canadian new entrant, Globalive Wireless has driven the company to revamp its business structure. Globalive Wireless said that it had taken the actions to address concerns of the Canadian Radio-Television and Telecommunications Commission (CRTC).

"We are confident that these changes will satisfy the CRTC," said Anthony Lacavera, Chairman, Globalive Wireless. "We've been working tirelessly as we prepare for a late 2009 launch and we are determined to deliver Canada's first truly competitive wireless offering in over a decade."

While the Globalive Wireless structure had previously been approved by Industry Canada, the company and its shareholders have agreed to make further changes to address CRTC concerns about its compliance with Canadian ownership and control rules.

"The changes reflect a concerted effort to satisfy any outstanding concerns of the CRTC," said Ken Campbell, CEO, Globalive Wireless. "We are working hard to launch a new mobile option in the Canadian market - which is highly anticipated and supported by Canadians."

The changes include:

Corporate structure: The corporate structure has been simplified by eliminating an intermediate holding company that was originally included in the structure for financing purposes.

Governance: Changes will be made to the Boards of Globalive Wireless and its parent corporation to give greater Board representation to the Canadian shareholder and to ensure additional representation by independent Canadian directors. Anthony Lacavera will become the Chair of the Boards of Globalive Wireless and its holding company.

Shareholder rights: Orascom Telecom (OT) has agreed to relinquish certain rights it had held under applicable shareholder agreements. For example, OT will no longer have a right to compel the Canadian shareholder, AAL, to sell its shares in the event of an offer from a third party to purchase 50% or more of its shares.

OT's rights to veto certain corporate changes have also been removed or reduced. OT's call right to compel AAL to sell its shares to OT's designee has been removed altogether.

Lastly, a mechanism has been established to protect both major shareholders in the event that either wishes to sell its shares after January 1, 2013.

Financial arrangements: OT has agreed to remove all positive and negative covenants and all indemnities from its loan agreements with Globalive Wireless. Globalive Wireless has been given the option to extend its loans from OT for up to three years from the current maturity date at the same or lower interest rates.

The CRTC has indicated that it will render its decision on or before October 23, 2009.

Posted to the site on 1st October 2009