Wednesday, February 26, 2020

EE targeted by Phones 4U administrator


Administrators to Phones 4U, the UK‘s second biggest mobile phone retailer which went into administration last year, are inching towards launching legal action against third party debtors including the UK’s biggest mobile phone group, Sky News reports.

PricewaterhouseCoopers (PwC) has issued a series of so-called “letters before action”, setting out the obligations of debtors to repay money owed to a company prior to its collapse.

Mobile phone network operator EE was reportedly contacted by PwC in relation to an undisclosed financial liability, despite EE having been forced to take a £336m charge in connection with the demise of Phones 4U.

That write-down was triggered by the need to book costs immediately which would otherwise have been spread over a longer period. 

In its most recent results, EE said: “The administration of Phones 4U resulted in the accelerated recognition, with no impact on cash, of £336m upfront customer investment costs that would have otherwise been recognised over the next five years.”

In an update to creditors last month, PwC said: “At the date of our appointment there were £21.1m of other book debts showing as due to P4U.

These debts were largely in relation to retrospective discounts on stock purchases and various marketing agreements that were in place with suppliers pre-administration.

Since our appointment we have been working to understand these debtor balances and the various set-off and other legal issues that surround these. We continue to progress individual strategies for the remaining cases in order to maximise realisations.”