Marconi today released the details of a restructuring plan that will slash its debts but leave shareholders with just 0.5 per cent of the new business.
Creditors of the debt-laden British group will receive a package of cash, new equity and new debt securities, leaving them with 99.5 per cent of the equity of the new group, Marconi Corp.
In return, Marconi's banks and bondholders will write off most of the group's net debts of about £3 billion (€4.7 billion). Marconi will be left with pro forma debt of around £300 million after the restructuring.
The debts are a legacy of the group's aggressive expansion in the United States as part of efforts to transform itself from a defence and electronics group into a telecommunications equipment maker just before the sector ran into trouble.
"The financial restructuring will allow the group to emerge with a balance sheet that we believe is robust and appropriate to the size of our business," chief executive Mr Mike Parton said.
AFP