The owners of Phones4u are considering refinancing the business as an alternative to selling it, it is understood.

Phones 4U’s owner, private equity firm Providence, is looking at a debt restructuring rather than a sale if bids received are insufficiently high, The Daily Telegraph reported. A sale remains the preferred option.

It is thought five parties have tabled bids for the Phones 4U, including private equity group BC Partners. Everything Everywhere, the mobile phone group created by the merger of Orange and T-Mobile, has dropped out of the process. Electricals group Dixons is thought never to have been interested, despite being speculatively linked to a deal.

Phones 4U was acquired by Providence and Doughty Hanson in 2006 when billionaire John Caudwell sold his Caudwell Group. He could receive a £200m payout in the event of a refinancing because of how the original deal was structured.