Negotiations with banks and bondholders are expected to wipe out debt and leave existing shareholders with very little

August 28, 2002

1 Min Read

LONDON -- Further to press speculation, Marconi plc (MONI)today confirmed that negotiations are continuing with its syndicate banks and aninformal ad hoc committee of bondholders in respect of the Group's financialrestructuring.As stated previously, the restructuring process is likely to involve a debt forequity swap for a significant proportion of Marconi's indebtedness. It iscurrently envisaged that existing holders of Marconi ordinary shares wouldreceive 0.5 per cent of the share capital immediately following therestructuring together with warrants allowing the purchase of 5 per cent of theissued share capital, subject to certain criteria.The prospective capital structure being discussed has been designed to provideflexibility for Marconi Group's ongoing success, maximise cash and overallrecovery for creditors and allow existing Marconi shareholders to maintain anongoing economic interest in the Group. It is currently expected that Marconiwill have pro forma net debt following the restructuring of approximately GBP300million.As stated above, the negotiations are ongoing and the above details may besubject to change. Further announcements will be made in due course.

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