Marconi postpones company restructuring announcement
Although it did report its results for the financial year to end-March, Marconi did not present its revised business plan on 16 May as previously intended.
According to chief executive Mike Parton, Marconi plc's restructuring discussions with its banks and bondholders have entered a new phase, so the parties agreed to withhold related information. However, some observers say that holders of Marconi's GBP1.8bn of bonds are likely to swap their debt by giving shares to the banks, which are owed GBP2.1bn.
For the year to end-March, Marconi made an operating loss of GBP463m compared to a profit of GBP754m one year ago. However, it also wrote off GBP5bn from the value of businesses acquired during the dot.com boom.
Nevertheless, targets for end-March - set by the new management team last September - were met. These include: re-organising into a Core network communications business (Network Equipment and Network Services) and a non-core Capital business (including the transferred Mobile Division), realising cash proceeds from disposals of over GBP1.5bn; reducing debt from GBP4.4bn to GBP2.7-3.2bn; and reducing annualised operating expense in Core business from GBP1.4bn to GBP1bn.
After a strategic review, Marconi began in January to further reduce operating expense run-rate to GBP870m by March 2003.