Investors demand £500m from C&W

Cable & Wireless's institutional investors are to demand that the embattled telecoms group returns £500m to shareholders in a special dividend.

Major shareholders are planning meetings with chief executive Graham Wallace before the company's March results to make a case for the payment. They are worried that Mr Wallace's strategy of growing the company's loss-making C&W Global arm is filtering cash away.

C&W's shares closed down 7p at a record low of 207p on Friday, after the company issued its third profits warning in 12 months. As predicted earlier this month in The Independent on Sunday, the company said revenues at its Global division would be down 10 per cent on the year.

"Wallace's position is not safe," said a senior fund manager. "Instead of spending the cash on loss-making ventures, it should be returned to shareholders."

Global generates 72 per cent of the company's total revenues, but contributes only 18 per cent of its earnings. As a result, Cable & Wireless's cash pile is shrinking. According to investment bank Nomura, the £4.6bn in cash the company ownedlast September will be little more than £1.3bn next year.