The company’s chair, John Bitove, resigned as executive chairman of fast food chain owner Priszm Income Fund. A telecom consultant says the failure of a company Bitove had invested in won’t affect the wireless carrier
The chairman of wireless startup Mobilicity has resigned from the board of a publicly-traded company he led after it filed for bankruptcy protection.
However, a telecommunications consultant doesn’t believe the move by John Bitove (pictured) will affect the carrier in the short term in part because he controls Mobilicity through a separate company.
“I think the [Mobilicity] brand is strong,” Iain Grant, managing director of the SeaBoard Group consultancy said in an interview Monday. In the short term, he said, the carrier’s management should just keep following their business plan.
However, he added, “going forward, when hands [of Mobilicity shareholders] have to dip into wallets to dig a little deeper to fund next stages” that might change.
In addition to employees, the other major shareholder in Mobilicity is New York-based Quadrangle Capital Partners.
Bitove couldn’t be reached for comment. In a statement Mobilicity said there will be no effect on its business. A spokesman for Bitove said the carrier has no relationship with Priszm.
Toronto-based Mobilicity operates in Toronto, Ottawa, Vancouver and Edmonton and will shortly start service in Calgary. It has yet to exploit the entire range of spectrum it owns, which includes southern and eastern Ontario, Victoria, B.C. and Red Deer, Alta.
SeaBoard estimates that Mobilicity, which will mark its first anniversary in mid-May, will have between 150,000 and 200, subscribers by the end of June.
Priszm Income Fund controls Priszm Ltd, the owner of 428 Kentucky Fried Chicken, Taco Bell and Pizza Hut outlets in seven provinces. The fund owns 60 per cent of Priszm Ltd., while the other 40 per cent is owned by Obelysk, which is also the controlling shareholder of satellite radio service XM Canada.
Priszm Income Fund has been trying for some time to sell 231 of its restaurants to a British-based restaurant company for $46.4 million, and is looking to sell the others. In a news release the company said it sought court protection to facilitate any deals.
Priszm has been in trouble for some time. In the third and fourth quarters of last year it was unable to comply with minimum levels of earnings before taxes and other deductions (EBITDA) as specified by its senior lender, although it said it has been generating positive net cash.
In its recent fourth quarter results the fund said Priszm Ltd. had restaurant sales of $415.8 million for the fiscal year ending Dec. 26, 2010, but suffered a net loss for the year was just over $40 million.
It was unable to pay its lender $65 million, which was due Dec. 31, and withheld $2 million in fees owed to the company that owns the three franchises used by Priszm called Yum! Restaurants Int’l.