The remaining 362 Phones 4u stores are unlikely to be sold as mobile phone stores with most of the retail estate broken up, administrators told Phones 4u bondholders today.
Bondholders were warned to ‘manage down’ their expectations of realising any significant value in Phones 4u's remaining store portfolio, which has been reduced to 362 stores, following the sale of 140 stores to EE and 58 stores to Vodafone this week.
The warning came today during a conference call in which Phones 4u administrators updated bondholders on the progress of the sale of the company, which went into administration last week after its network partners Vodafone and EE terminated their trading agreements.
PWC partner Paul Copley, who led the call, told bondholders that although they are still talking to 'many interested parties about a portfolio of stores or individual stores,' he added that as time goes on, 'it is highly unlikely' the administrators will be able to find buyers willing to buy as many stores as were sold to EE, which bought 58 stores.
He added that he did not expect the bulk of the stores to be sold off as mobile phone stores, saying that he expected the estate to be broken up. He said: ‘We are still talking to other parties about other stores but I would manage down your expectations in terms of any material value.’
Copley said Life, Phones 4u’s MVNO, which has an MVNO partnership with EE, has yet to be sold. He said that there are a number of interested parties adding that ‘naturally EE is the most interested party.'
However he warned bondholders that Life fell outside the secure structure and that any monies raised from the sale of Life would be used to pay down creditors and not paid to bondholders.
Phones 4u’s administrators are also continuing to work on ‘a very large receivable balance’ due from the network operators, Copley said. He warned bondholders it would take time for the administrators to gather the required data to fully understand precisely what was owed before it could begin negotiations with the operators. ‘It is a significant amount so we will seek to maximise the opportunities as far as possible,’ he said.
The administrators also confirmed 'a number of parties had expressed a view in taking litigation' against Phones 4u's owners, directors and mobile operators. Copley said: ‘We will review all the evidence carefully and that will take a number of months.’
He also asked bondholders to send any evidence they might have that could be used in a legal case. He said some had already done this, adding: ‘It is our job to take that action to the extent that there are any calls for action.’