Potential deal would see Phones 4u stores open if operators are willing to agree terms
Phones 4u bondholders are seeking a deal that would see them write off most of their debt to keep the business running, potentially saving the business.
The complex arrangement would only be possible if EE and Vodafone were willing to extend commercial agreements on the terms the operators were proposing before talks broke down.
Phones 4u’s owners, BC Partners, had loaded debt onto the firm in the form of debt and sold on the Irish stock market.
The bondholders legal representatives, Brown Rudnick, have proposed the deal that would see most of the firm’s debt written off, if EE and Vodafone were willing to offer new deals to the stricken retailer.
The law firm represents a group of parties who hold senior bonds worth £430 million. They are higher up the creditors list than many other parties and it says that this group would be willing to take the terms that the operators were pushing for prior to talks breaking down.
“Our bondholder group has been working hard to ensure that the company’s cost structure can be adjusted to meet the commercial terms that EE and Vodafone put to the previous owners,” said Brown Rudnick partner Louise Verrill.
“We look forward to collective meaningful engagement with Vodafone and EE, to save the jobs and maximise returns to creditors and other stakeholders.
“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.”
EE is in discussions with administrators, PricewaterCoopers, with a view to purchasing a ‘handful’ of stores.The firm has signed an NDA with PwC and is in the process of identifying a number of target locations.
A source close to EE confirmed that all members of existing Phones 4u staff would be offered jobs with the operator as part of any deal.
Vodafone has also confirmed it had been approached by administrators, but refused to elaborate on any discussions that it was having.
Sources at Three ruled themselves out of the running for any retail outlets, while O2 were unavailable for comment.
Dixons Carphone announced yesterday that all 800 staff who work in Phones 4u concessions outlets in Currys/PC World stores, would be offered jobs with the retailer.