The Globe & Mail reports that indebted reseller Primus Telecommunications Canada has won court protection from creditors, as it seeks approval to sell itself to US business-focused telco Birch Communications. The Ontario Superior Court in Toronto granted Primus protection under the Companies’ Creditors Arrangement Act on Tuesday, and Primus has filed a petition to have the Canadian decision recognised in the US, where it has a small-scale operation.
Court filings revealed that voice and internet reseller Primus’s revenue fell to CAD166 million (USD113.7 million) in 2015 from CAD229 million in 2012, with underlying residential sales – accounting for over half of 2015 revenue – declining by an average of 9% per year. Primus reported net losses of CAD830,000 in 2014 and expects to post a CAD13 million net loss for 2015, while EBITDA fell to an estimated CAD10 million in 2015 from the CAD41 million recorded in 2012, as subscribers increasingly cancelled landlines and long-distance calling packages. Toronto-based Primus (which has historically marketed itself as Canada’s biggest ‘alternative’ telco) has more than 200,000 remaining residential customers and 23,000 small and medium-sized business clients, while the group has around 27,000 residential customers in the US and Puerto Rico. Prospective buyer Birch claims on its website to serve 200,000, mostly business, customers (small, mid-market, enterprise and wholesale) in the US.