Sir Roger Regrets

Marconi chairman Sir Roger Hurn tells shareholders, "This has been a difficult period..."

July 12, 2001

3 Min Read

LONDON -- Marconi plc (London and NASDAQ: MONI). Sir Roger Hurn,Chairman of Marconi plc, has today written to Shareholders; the text of SirRoger’s letter is as follows:Following my letter of 18 June 2001 and in advance of the Annual GeneralMeeting on 18 July 2001, I would like to bring you up to date on recentevents affecting our Company.On 4 July, the Board issued a trading statement to the London StockExchange, which has been widely commented upon in the media. The statementexplained that there has been a marked deterioration in the short-termoutlook for the Company as a result of a slowdown in the placing of ordersby several of our major customers.In the early hours of the morning of 4 July, the Company entered into anagreement with Philips for the sale of the Company's Medical Systemsbusiness. Under the rules of the UK Listing Authority, the Company wasobliged to announce the sale without delay. The Board had not by that timebeen able to complete its review of the trading position of the Group. Wewere advised by our brokers, in order to prevent a false market in ourshares, that we could not permit trading in the Company's shares on thebasis of an announcement of a major disposal without also, at the same time,informing the market of the Company's current trading position. Accordingly,we were advised, by our brokers, that we should make an application forsuspension of listing of our shares pending the announcement of the outcomeof our review of the Group's trading position. The suspension took placebefore the market opened on 4 July. The trading update was issued thatevening after the market in London closed, and trading in Marconi’s sharesresumed the following morning in London.Concerning the senior management of Marconi, your Board has announced thatit will not now be implementing the succession proposals previouslyannounced. Lord Simpson will remain as Chief Executive and I will continueas Chairman. John Mayo will not now become Chief Executive and has resignedfrom the Board and the Company.Following consultation with shareholders and in light of the movement in theCompany’s share price, the Board has decided to withdraw Resolution 14,relating to the option exchange proposal, which was to be put toshareholders at the forthcoming Annual General Meeting. You need take noaction to withdraw any proxy vote you have given in respect of Resolution14, since I will not now propose the Resolution to the meeting.This has been a difficult period for the Company and its shareholders whichthe Board sincerely regrets. Looking forward, the Board and management arefully committed to restoring the Group's trading performance and rebuildingconfidence in the Company's prospects. We remain confident in themedium-term outlook and would like to emphasise the strength of the Group'sfinancing with committed banking facilities through to March 2003 ofapproximately £4.5 billion in addition to the Group's long-term bondfunding. With its reduced cost base, the added flexibility of its outsourcedmanufacturing facilities, its technology and skilled workforce and strongincumbent customer base, Marconi will be well positioned to benefit from themarket upturn when it occurs.

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