UK Edition
Vertu owner plans pre-pack administration for luxury smartphone manufacturer with jobs at risk
The Turkish exile owner of the British luxury smartphone brand Vertu plans to put its manufacturing arm into administration to wipe out heavy debts.
Representatives of Paris-based Murat Hakan Uzan met concerned staff at Vertu Corporation Ltd (VCL) headquarters in Hampshire this afernoon, to reveal plans for a pre-pack deal.
He will attempt to secure approval from creditors at the High Court next week to transfer assets to a new company that will not be saddled with tens of millions of pounds of unpaid bills. It comes as one of VCL’s creditors, a technology recruiter called WA Consultants, petitions for the company to be wound up.
A statement to the court from VCL director Jean-Charles Charki, seen by The Telegraph, says the company “is currently insolvent” with an accounting deficit of more than £128m.
It adds that Vertu AK, Mr Uzan’s French holding company, has offered to buy VCL out of administration from the insolvency firm Griffins for €2.2m (£1.9m). Only around £350,000 would be recovered if VCL were to be liquidated, the High Court will be told.
The figures compare with the €200m the private equity firm EQT reported paid for the Vertu group of companies five years ago.
Mr Charki will say that Mr Uzan found the company in a worse state than he expected when he took control in March. Only 9,000 Vertu handsets, which start at around £10,000, were sold last year compared with 57,000 at its peak in 2007, according to the statement.
Mr Uzan acquired Vertu, including VCL, in a deal with its previous owner, a Hong Kong hedge fund manager named Gang, or Gary, Chen. The two men have since threatened to engage in legal action over the ownership of the company.
Mr Chen alleges Mr Uzan took did not pay an agreed price for Vertu. The Turk claims in return that Mr Chen unlawfully used company assets.
The Telegraph revealed this week that nearly 200 employees have not been paid this month and hundreds of thousands of pounds has been reported missing from the company’s pension fund. Staff are normally paid on the 20th of the month. Mr Charki will tell the court payroll of around £500,000 was due today, the 30th, but not paid.
Staff were told this afternoon by Mr Uzan’s representatives, who included the law firm Harbottle & Lewis, that they will not be paid until after the hearing, on condition a pre-pack administration is approved by creditors.
As part of its overdue bills, VCL owes around £2.5m to Microsoft. It sub-leases its headquarters from the software giant, a legacy of its origins as part of the Finnish mobile giant Nokia, which Microsoft acquired.
Mr Charki will tell the High Court that if the pre-pack administration is rejected, “it is conceivable that the workforce could be made redundant”.
Staff were told this afternoon that Mr Uzan hopes they will be transferred to the new debt-free operation. A new vehicle, Vertu Manufacturing Ltd, was set up last week, according to Companies House documents.