Phones 4U has roughly 760 million debt outstanding, 430 million 9. 5 senior bonds due April 2018, 205 million 10 paymentinkind (PIK) notes due April 2019 and a 125 million revolving credit facility that matures in March 2017.NEW YORK (AP) The first half of the year was full of surprises on Wall Street. Even experts and investors who expected more volatility after a historically calm 2017 were caught off guard by many of the developments inside and outside the markets this year, including the rapid gains stocks made phones 4u dividend recap
Dividend recaps which involve increasing borrowings in order to take cash out of a business became a common feature of the private equity industry in the years leading up to the 2008 financial crisis, when credit was cheap and abundant.
BC Partners sealed a 223m dividend recap from the mobile phone retailer last year, financed using a PIK note. The firm recouped its initial investment, while Phones 4Us Apr 12, 2015 A year before its demise, Phones 4u took out expensive highinterest paymentinkind loans so it could fund a 223 million special dividend to BC Partners.phones 4u dividend recap Their behaviour appears to have been designed to inflict the maximum damage to their partner of 15 years, giving Phones 4U no time to develop commercial alternatives. With an apparent lack of irony this is a private equity firm complaining that a competitor has acted competitively.
Phones 4u remains profitable, with turnover of more than 1bn. Jonathan de Mello, head of retail consultancy at Harper Dennis Hobbs said: The administration of Phones 4u shows how even a very profitable business can struggle in phones 4u dividend recap BREAKING DOWN 'Dividend Recapitalization' The dividend recap has seen explosive growth, primarily as an avenue for private equity firms to recoup some or all of the Drivers of Dividend Recap in the latter part of 2012 for highly leveraged dividend recapitalization and stock buyback transactions by both financial So far we have heard the founder of Phones 4U complaining that there must have been collusion by the mobile carriers to drive them out of business. This is of course denied. The situation will also no doubt raise protests about the use of dividend recaps, especially when a business goes under so soon after the recap.