Reply to post: Re: A year left to run on the EE contract?

Phones 4u slips into administration after EE cuts ties with Brit mobe retailer

Peter Gathercole Silver badge

Re: A year left to run on the EE contract?

Firstly, the shares will drop like a stone once the news was out that there was a brick wall ahead, and that may affect the way they can generate operational credit. A potentially solvent company operating without credit is doomed to fail (remember what happened to Woolworths).

Secondly, the current owners may want to bail out of the business, and this looks like a simple way of doing it while offloading the hassle of trying to find a new operating model to someone else. The current owners will just become creditors, and will either get some money back if it is wound up, or will get shares in the newly re-invented company if a new operational model can be found.

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