Could Phones 4u still be saved? A last minute plan is being put into motion to swap some of the money owed to creditors for equity. If EE and Vodafone agree to the plan and start supplying contracts again, it could mean that all jobs are saved.
If EE and Voda come back on-board, creditors could then receive even more as shops start trading again. Until just a few days ago, it appeared that stores would be sold off piece-by-piece.
Louise Verrill, from Brown Rudnick, a company working for the creditors, has told newspapers that bondholders would be prepared to compromise…
We have proposed a restructure of the business that means the capital structure will no longer be an impediment to achieving the commercial outcome which allows the company to continue as a going concern.
The bondholders would take a significant write down on their debt which would make the business commercially viable and lay foundations for the 5,596 jobs to be saved.
We’ve already seen Carphone Warehouse / Currys coming forward to fill some jobs in some stores, but getting those many high-street stops trading again would be a great turn-around for the thousands of Phones 4u staff.
The Telegraph also reveals today that BC Partners, the owners of Phones 4u until just a few days ago, were demanding unreasonable terms from Vodafone and EE. This seems to add to further evidence to suggestions that BC Partners had perhaps decided to off-load the company and paid themselves £200 million to recoup their cash from bonds.
Could it have been that BC Partners requested some unreasonable terms to the networks, knowing that the networks would refuse, only to put the company into administration blaming those very same networks for refusing to supply Phones 4u?
Or is this the networks? Keen to expand on the high street with their own stores and increasing their own profits?
Perhaps a bit of both?
Under the debt burden loaded onto it by BC Partners, it is understood that Phones 4U was proposing terms that were nearly twice as expensive to the mobile operators as those on offer from its main rival, Carphone Warehouse.
Although this new rescue could see stores re-open, EE don’t appear to be too keen…
Vodafone, which earlier this year announced plans to expand its own retail estate by 150 stores, declined to comment on the offer from Phones 4U creditors. It is understood that EE believes the plan would be unlikely to work because Phones 4U would also need to revive partnerships with Apple and Samsung, and its credit insurers.
More as we get it.