Phones 4u Administrators Have Two Days to Reopen U.K. StoresAmy Thomson
Phones 4u Ltd.’s administrators plan to spend the next two days trying to find a new mobile carrier ready to sell its service through the stores or the chain will be liquidated.
“We’ve got some conversations to have with a range of people over the next 24 or 48 hours to reopen a few shops, a few outlets, and see if someone would like to buy,” Rob Hunt, a partner at PriceWaterhouseCoopers LLP acting as an administrator for the business, said in an interview yesterday.
A new carrier partner will allow PwC to reopen a few stores as it looks for a buyer, Hunt said. PwC has been appointed to oversee Phones 4u’s business after the mobile- phone retailer lost contracts with wireless carriers Vodafone Group Plc and EE Ltd., representing 90 percent of the plans it sells.
EE and Vodafone said yesterday that they’d considered a joint bid for Phones 4u earlier this year. EE said that the deal was too complex and Vodafone said it walked away after receiving legal advice on a bid. Hunt declined to comment on how much Phones 4u might be worth.
“The business faces substantial costs, and if there’s not enough funding to pay for those costs and there’s not a realistic prospect, I wouldn’t be doing my job properly,” Hunt said in an interview. “We’d have to liquidate.”
The company, owned by BC Partners Holdings Ltd., shut its stores yesterday and has said it will refund customers who have ordered devices, like Apple Inc.’s new iPhone 6, and not received them.
John Caudwell, who founded the business in 1987 and sold it in 2006 for 1.46 billion pounds ($2.4 billion), said that he thinks that prospects are dim for a sale of Phones 4u now that the three biggest U.K. wireless carriers, EE, Vodafone and Telefonica SA’s O2 have declined to renew their contracts.
“There’s nothing to buy,” Caudwell said in an interview on Bloomberg TV. “Ironically, the people who are going to buy the shops and buy them at a bargain basement price are the people who have perpetrated the disaster.”
Emma Hart, a spokeswoman for O2, declined to comment on Caudwell’s statement. O2 stopped selling new contracts through Phones 4u stores in 2012 and only maintained existing customers until the contract ended in January.
Vodafone spokesman Simon Gordon declined to comment beyond the company’s statement yesterday when Vodafone said they “strongly reject any suggestion that we behaved inappropriately at any stage during our negotiations with Phones 4u.”
EE spokesman Mat Sears didn’t immediately return calls seeking comment.
Phones 4u hasn’t dismissed any employees yet, Hunt said. The administrators will also be working to access the funds Phones 4u needs to pay the business’s costs, including workers’ wages, PwC said in a statement.
Administration is formal protection from creditors similar to U.S. bankruptcy. The Newcastle-Under-Lyme, England-based retailer has 635 million pounds of debt as well as a 125 million pound revolving credit facility, according to data compiled by Bloomberg.
The closely held company’s 430 million pounds of bonds sold in March 2011 fell 18.2 pence to 19.44 pence yesterday after the company said it filed for administration.
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