Fresh bonds deal buoys Marconi
MARCONI, the telecoms equipment maker that has taken a knife to its business and slashed jobs, has struck another cut-price bonds deal, sparking an early surge in its battered share price.
Crushed by the collapse of its telecoms markets last year, the company once known as GEC has been struggling to reduce its debts. In the latest deal, the group will pay £110m for bonds worth £200m. It was a rare piece of positive news for Marconi. Its shares, which have fallen 65% in the past six months, climbed 5.6% to 33p.
The firm, which bought back $220m (£143m) of bonds last month, said it was not seeking to make any further purchases for now but more buybacks could follow if the terms were favourable.
The news comes four days before Marconi is due to meet bankers to discuss a loan refinancing. Marconi must refinance a drawn e4.5bn (£2.6bn) loan and an undrawn e3bn loan in order to extend the maturity of its debt past next year.
By selling subsidiaries in industries ranging from medical systems to gasoline pumps to ink-jet printers, Marconi has cut net debt to £3.5bn, or £2.9bn including recent disposals. The figure stood at £4.4bn last year.
Earlier this week Marconi posted more dismal results and said it would shed up to 4,000 more staff on top of 9,000 job losses last year. In a turbulent 12 months, Marconi has issued three profit warnings, sacked its top executives and lost its lustre as one of Britain's proudest firms. Its market value has plummeted to less than £1bn from more than £35bn.
