Marconi business plan still elusive

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The Independent Online

The troubled telecoms equipment maker Marconi has abandoned plans to update the City on its future funding and business plans today as key talks with both its banks and bondholders continue.

The troubled telecoms equipment maker Marconi has abandoned plans to update the City on its future funding and business plans today as key talks with both its banks and bondholders continue.

The company, which had promised to update the market on the progress of those discussions when it reported fourth-quarter results today, said it would not present its new business plan.

Discussions with its banks and bondholders had now entered a "new phase", it said, adding "tripartite" discussions were under way and had been "constructive in nature".

"In these circumstances it has been agreed between the three parties that it would be helpful if no new information material to these discussions is published at this time," the company said.

Marconi, which has been locked in refinancing talks for the best part of half a year, is recently thought to have persuaded its banks and bondholders to negotiate side by side. Previously, it had been negotiating with the parties separately.

"It's only very recently that they've got to the point where all three parties were prepared to sit round the table at the same time. That's got to be a good sign and shows the talks have significantly moved forward," one City source said.

The source predicted an announcement on how the company will be financed going forward could appear over the coming month.

The company, which is widely expected to carry out a debt-for-equity swap as well as agree to a new loan, is trying to refinance about £2.2bn of loans and restructure about £2bn of bonds.

The decision to keep quiet on the progress of the restructuring talks comes less than two months after Marconi warned it had failed to sign a vital new refinancing package.

Last month, the company agreed to increase the interest payments it was making on its debt and ring-fenced £850m of its £1.4bn cash pile aside to aide the restructuring.

Mike Parton, the company's chief executive, said then that he believed the company would have a more appropriate debt structure in place "by the end of the summer".

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