Phones 4U Rescue Deal Hopes Dashed

Hopes for a last-ditch rescue of Phones 4u have been dashed as talks continue to save some of its shops and jobs.

Administrators PricewaterhouseCoopers (PwC) said it was in discussions with three parties over the potential sale of assets following the company's collapse on Sunday.

However, it said a proposed debt-for-equity swap in which bondholders would wipe out an estimated £760m of debt to reopen contract talks with network operators EE and Vodafone was not an option.

PwC has said it expects to pay the majority of salaries and wage arrears and has paid tribute to the co-operation of staff since the shock demise of the business.

Joint administrator Rob Hunt said: "Thousands of people have stuck with us during the course of this week in difficult circumstances."

Some 560 stores and 4,800 jobs are still at risk after Dixons Carphone agreed a deal on Wednesday to take on the 800 staff who had worked at 160 Phones 4u concessions within Currys/PC World stores.

All Phones 4u stores are currently shut while PwC attempts to find buyers.

Phones 4u has outlets all over the country

A call with bondholders on Thursday heard a statement from Phones 4u's private equity owner BC Partners in which it said it was devastated by the retailer's collapse.

EE and the other network operators were accused of a "co-ordinated attempt to kill off" Phones 4u after their failure to renew contracts left the company with no option but to call in administrators.

Entrepreneur John Caudwell, who set up the operation in the 1980s before selling it for £1.5bn in 2006, called the behaviour of the networks "extremely callous, extremely ruthless".

Vodafone said it rejected any suggestion that it behaved inappropriately during its negotiations with Phones 4u and indicated that the firm's debt repayment schedule hampered the discussions.

However, this was rejected by BC Partners in its statement.

EE said its decision not to renew its contract, which ran until September 2015, was in part driven by uncertainty over the long-term viability of Phones 4u.

The decision triggered the collapse of Phones 4u as it left the retailer without a single network partner.

Sky News revealed on Monday that Vodafone and EE had held talks about a joint takeover of Phones 4u as recently as July but abandoned the proposed deal without explanation.