Marconi starts refinancing talks with bankers

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The Independent Online

The troubled telecoms equipment maker, Marconi, started key talks with its bankers to renegotiate its 7.5bn euros (£4.7bn) of loan facilities in an effort to get its finances into shape.

The troubled telecoms equipment maker, Marconi, started key talks with its bankers to renegotiate its 7.5bn euros (£4.7bn) of loan facilities in an effort to get its finances into shape.

While the company has held two major meetings with its bankers since its shocking trading update in early September, yesterday's gathering was thought to be the first centred solely on renegotiating the facilities.

The meeting, which is thought to have lasted two hours, was attended by Marconi's senior executives as well as representatives of the 31 banks involved in the syndication of the loan facilities.

Shares in Marconi closed down 12 per cent at 34.66p.

Marconi, which recently reported a £5bn half-year loss, is battling to reduce £4bn of debt after a disastrous year, which has seen it issue two profit warnings and part company with its top three executives. So far this year, about 6,400 workers have left the business.

One source, who described yesterday's meeting as both "positive" and "constructive", said he was not expecting any immediate conclusions on the debt refinancing as the talks were at an early stage.

When Marconi published its half-year results earlier this month, it said it hoped to refinance or restructure the facilities by the end of its current financial year in March.

The company has two facilities including one of 4.5bn euros. The other 3bn euros facility has not, as yet, been accessed. Both mature in March 2003.

Marconi also said it had sold 6.2 million shares in Italian-listed Lotomatica for £25m, leaving it with 4.9 million shares in the firm. Earlier this week, it sold its 21.5 per cent stake in Siemens Telecommunications, known as Sietel, for £20m cash. The cash will help reduce its debt to £2.7bn from £3.2bn by next March.

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