With PwC acting as administrator, the company went into administration on Sunday [14 September] after the withdrawal of EE, O2 and Vodafone products from its stores, placing 5,596 jobs and more than 700 outlets at risk.
Owned by pan-European private equity house BC Partners, a statement from the company said on Sunday: ‘Following the decisions of Vodafone and EE, Phones 4u has no option but to seek the appointment of administrators from PwC’.
The statement continued:’Phones 4u is a profitable, well-managed business with 550 standalone stores, employing 5,596 people. The company has a turnover of over £1bn, EBITDA of £105m for 2013 and significant cash in the bank.’
A&O restructuring and corporate insolvency partner Ian Field is leading a team advising Phones4u alongside the firm’s managing partner of the global restructuring and insolvency group Mark Sterling.
Clifford Chance is understood to be advising the lenders of the company’s rolling credit facility on the administration with a team led by finance partner Charles Cochrane.
CMS Cameron McKenna is also advising on the mandate, and is acting for the security trustee, ING Bank, with corporate recovery and restructuring partner Martin Brown advising.
Shortly before the administration, Moody’s downgraded its outlook over the company’s ability to repay its debts following Vodafone’s decision to not renew its network agreement with Phones 4u, which represented more than 20% of the latter’s revenues and gross profit.