Phones4U asks noteholders to consent to trustee change, amendments

By Caroline Salls

Pittsburgh, July 30 – The holders of Phones4U plc’s 9˝% senior secured notes due 2018 are being asked to approve the appointment of GLAS Trust Corp. Ltd. as successor trustee after Citibank, NA London Branch was removed as trustee on Wednesday, according to a consent request released Thursday.

In connection with the appointment, GLAS agreed to cap the liabilities of Phones4U and the guarantors of the notes toward the trustee under an indemnity, expenses undertaking and remuneration undertaking included in the indenture to the extent the liabilities relate to any threatened or actual claim against it arising from its position as indenture trustee, under an intercompany agreement and under any additional intercreditor agreement or security documents.

The liabilities will be capped on condition that security agent ING Bank NV London Branch makes available sufficient funds in a trust account held with a third party account bank for a period of at least two years following the date on which the final distribution is made from the Phones4U estate.

The capped liabilities can be paid from those funds as and when they fall due, the consent request said.

In addition, the security agent is being asked to approve remuneration for Phones4U’s administrators.

As a result, the company said it is seeking to amend the notes indenture to explicitly allow the trustee to instruct the security agent in connection with approving any of the administrators’ remuneration with the consent of holders of a majority in principal amount of the notes.

According to the consent request, an informal noteholders’ committee unanimously supported payment of 80% of the administrators’ remuneration accrued on a time basis up to Nov. 30, 2014 in December 2014.

The noteholders are also being asked to consent to amendment of the indenture to implement the cap and remuneration approval provisions and the entrance into a third supplemental indenture.

Consents are due on Aug. 7.

Phones4U is a mobile phone retailer based in Newcastle-under-Lyme, England.

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