Unsecured creditors in Phones4u set for payout shortfall shock
FAILED phone retailer Phones4u’s administrator PwC has said it has made progress in unravelling the firm’s financial affairs.
Some 3,500 employees who were made redundant when the firm collapsed. The wages they are owed are likely to be paid before the end of the year.
But the administrator has warned that he winding-up of Phones4u will see the taxpayer lose out to the tune of £78m and that unsecured creditors would receive just 4p for every pound owned.
Banks and bondholders who invested in the North Staffordshire firm, which went bust in September 2014, will receive 20-24p per pound – double the amount originally expected.
The Guardian newspaper report that around £168m is owed to unsecured creditors, including VAT and corporation tax due to HMRC, of which around £670,000 will be paid.
PwCsaid that progress has been made in tackling unpaid staff wages and benefits totalling £3.4m, with the remainder expected to be paid by the end of 2015.
Just over 3,500 of the 5,500 staff who worked for Phones4U were made redundant, while around 1,200 transferred to new jobs as 200 stores were sold to Vodafone and EE. Another 788 transferred to jobs at Dixons Carphone.
PwC recovered £27m from selling stock, the bulk of which came from the sale of Apple handsets in the Phones4U main warehouse and stores.
Phones4U went bust after Vodafone and then EE, two of the biggest phone operators, did not renew contracts to sell through its stores.
The chain was founded in the mid-1980s by Midlands businessman John Cauldwell who sold it for £1.5bn in 2006.
