Staff at UK retailer Phones 4u have been told that their wages are likely to be curtailed as hope for the troubled company begins to fade.
The Independent reports that an internal document sent to the chain’s 5,596 staff says that while they will still be paid as administrators PwC hunt for a buyer, they may not receive the full amount of pay that they’d usually expect to receive” and that a decision regarding outstanding accrued bonuses and commissions is currently under review”.
This is despite the fact it currently has 110m in the bank, is owed 147m by debtors and is sitting on 89m worth of stock.
However, debts stand at around 760m with 200m owed to unsecured creditors.
In recent days a number of bondholders have questioned the decision to close the chain, announced earlier this week, as its deals with EE and Vodafone still have some time to run. PwC, however, has warned that Phones4u is losing in the region of 750k per day.
Administrator Rob Hunt added: Over the course of the last few days we have considered all the restructuring options … [but] there is no realistic prospect of a debt-for-equity swap.”
In more positive news EE, Vodafone and one of Three, Dixons Carphone and Sky are apparently in talks to acquire at least some of Phones4u’s stores.