Phones 4u Ltd.’s administrator said it will close 362 stores and cut almost 1,700 jobs as the failed U.K. mobile-phone chain sells off its assets to pay bondholders and salaries.
PricewaterhouseCoopers LLP, which was appointed administrator last week, said the sale of an additional 198 shops and 160 concessions to former carrier partners EE Ltd., Vodafone Group Plc and retailer Dixons Carphone Plc (DC/) has been approved by the courts, the company said in a statement yesterday. The buyers will take on about 2,000 staff members.
The company is selling stores and inventory and cutting employees after EE and Vodafone said they wouldn’t renew their contracts with the store, depriving the retailer of the source of 90 percent of the plans it sells.
Phones 4u’s 9.5 percent notes, which slumped to 18.6 pence on Sept. 15, were quoted at 37.5 pence at 8.33 in London today.
PwC said it would keep 720 people to assist with the closings in the short term. The company said on Sept. 19 that it had cut 628 employees who worked at the head office and in sales, and retained 400 to assist the administrators.
EE agreed to buy 58 Phones 4u shops and take on 359 employees, the largest U.K. wireless carrier said yesterday. EE is also considering a bid for the Phones 4u Life business, a reseller of EE’s service, a person familiar with the matter said, asking not to be named because the talks are private.
Dixons Carphone, the London-based electronics retailer that agreed last week to take on 800 Phones 4u employees, is in negotiations to buy some Phones 4u stores, people familiar with the matter said.
Vodafone said on Sept. 19 that it plans to buy 140 shops and take on about 900 employees. Phones 4u had 700 stores and concessions and almost 5,600 employees when PwC was appointed as its administrator last week.
Vodafone’s agreement to buy stores and inventory will raise 12.4 million pounds ($20.3 million) while EE’s deal for shops will raise 2.5 million pounds, PwC said in a statement.
PwC said on Sept. 18 that there are potential buyers for the retailer’s insurance business, and that New York-based Assurant Inc. is among the interested parties.
Phones 4u’s debt includes 635 million pounds of bonds and a 125 million-pound revolving credit facility, according to data compiled by Bloomberg. The bonds comprise 430 million pounds of 9.5 percent senior secured notes maturing April 2018 and 205 million pounds of 10 percent payment-in-kind notes due April 2019, which give the company the option to pay interest with more debt.