Phones 4u creditors set to learn how much they may receive

CREDITORS of collapsed Staffordshire-based mobile phone retailer, Phones 4u, are set to learn how much they can expect to receive following the demise of the company last year.

However, it is thought little can be salvaged from the company, making large payouts unlikely.

The Telegraph reported PwC was expected to give creditors a progress report on its work since Phones 4u’s demise in September last year, when the high street chain ceased trading with unsecured debts of £168m.

The administrators warned in November that unsecured creditors were likely to get around 0.4% of their money reimbursed, as the £430m owed to banks and bondholders took priority.

Of the remaining creditors, HM Revenue & Customs is among those likely to be worst hit, with an outstanding £78m in VAT and corporation tax set to be written off.

Stonehill Capital Management, a US hedge fund, has bought up a large chunk of senior debt and in February signed a confidentiality agreement with PwC to enable it to access early findings from the administration.

PwC is also expected to update creditors about an investigation started by the law firm Quinn Emanuel Urquhart & Sullivan into the circumstances of the collapse.

The Newcastle-under-Lyme company generated pre-tax profits of £43.8m on sales of £1.16bn in 2013, leading to concerns about how quickly it crashed.

The company blamed the loss of service agreements with the likes of EE and Vodafone as the reason for its demise. The collapse cost almost 1,700 jobs and led to more than 360 of the company’s shops closing.