Two-way messaging licenses held by the now-bankrupt paging company TSR Wireless L.L.C. will be auctioned off near the end of this month, according to the company’s bankruptcy trustee Charles Forman.
The auction for the two two-way licenses, informally known as the channel 4 and channel 15 licenses, will be held on March 20, Foreman said. He said several parties had expressed interest in the auction, but declined to provide specific details.
The auction of TSR’s two-way licenses is an attempt to raise money to pay back the company’s creditors. TSR owes more than $200 million to a variety of banks. The company filed for Chapter 7 bankruptcy Dec. 8 in New Jersey, a week after it turned away its 1,700 employees and closed its more than 275 retail stores. Chapter 7 is the most severe type of bankruptcy and calls for the liquidation of all the company’s assets.
To help with the auction, Foreman hired Seneca Financial Group Inc., which has worked with a variety of telecommunications companies like Siemens AG and L.M. Ericsson.
“At this point we are working with the trustee to develop an auction for the two nationwide two-way licenses the company has,” said James Harris, president and owner of Seneca.
Harris said TSR has just finished its two-way network beta testing and was ready for deployment before it filed for Chapter 7.
“There was no money to build out the two-way licenses,” he said. “At some point the company and the banks were not able to agree on the conditions on lending more money.”
Harris said TSR tried in vain to sell itself-unconfirmed rumors have circulated about negotiations with Metrocall Inc.-but could find no buyers, and was forced to file for bankruptcy. Neither Harris nor Foreman offered an explanation for why the company filed for liquidation instead of a Chapter 11 reorganization.
While Foreman and Harris couldn’t speculate on the potential participants in the two-way license auction, Donald Longueuil, an analyst with the Yankee Group, said SkyTel Communications Inc. would be the company most likely to buy up the licenses.
Longueuil said other messaging companies, including Arch Wireless Inc., WebLink Wireless Inc. and Metrocall, aren’t really looking for more capacity.
“They don’t have the need right now,” he said.
But SkyTel, which is doing much better financially than its competitors, could move to increase its capacity and national footprint by purchasing TSR’s two-way licenses, as long as the licenses fit its network technology.
Another buyer possibility, Longueuil said, is a major voice carrier that is looking to increase its messaging network offerings.
Harris said there is a “nice group of people” looking to buy the two-way licenses.
While TSR’s two-way licenses are the company’s most advanced assets, it also has a one-way paging network, an inventory of equipment and-before it went under-2.6 million customers, all of which represent more money for TSR’s creditors.
“We will work to sell the one-way paging business as soon as possible,” Harris said.
An auction for TSR’s one-way network, including its customers and equipment, is scheduled for March 23, Foreman said.
“That would be offered as a package … or on a regional basis,” Foreman said.
While it would be easier and more efficient to sell the already established one-way nationwide network as a whole, Foreman said, it most likely won’t happen that way.
“There appears to be more interest on a regional basis,” he said.
Harris said if no nationwide buyer is found, the network would most likely be broken into five regional areas and sold off to regional paging companies.
Many agree TSR’s most valuable assets are its customers, many of who are still on its network thanks to about 80 former TSR employees across the country who are continuing to maintain the network.
“There are still technicians on call,” Harris said. “I’ve been very much impressed by that.”
Harris said most of TSR’s paging customers have been retained through the bankruptcy proceedings, and represent a major selling point for the one-way network auction. He said TSR’s resellers have continued to add customers to the network even after the bankruptcy filing.
“As long as they (the technicians) continue to function, we will still have a sizable customer base,” he said. “We want those customers to be preserved and we want the buyer to get a good deal.”
“I believe we actually retained most of those customers,” Foreman said.
Foreman said there was a significant drop in TSR’s customer base in December due to the news that the company had filed for Chapter 7, but that the number had since stabilized. Foreman was unable to give exact numbers of customers, but he said potential buyers would be able to find out.
Foreman said TSR also boasts a large store inventory of phones, pagers and surplus items like transmitters. He said those items would also be sold near the end of this month.
