Marconi has ditched plans to seek an extended line of credit after concluding that the current downturn in telecoms equipment spending will last longer than forecast. In other words, it does not think it will sell enough kit to pay back the extra money it would owe.

But without this money, Marconi cannot pay back the money it already owes to banks and bondholders. Marconi has approx. £1bn in cash, and a few, very few, businesses left to sell. It looks like the company is heading for the knackers' yard for dismemberment by its banks. If this happens, bondholders will take a serious haircut, while shareholders will get a big fat nothing.

Marconi expects the market will remain deflated until at least the end of its current financial year, in March 2003. It says it will develop a revised business plan over the next few weeks.

However the company is sticking to its previous estimates of sales for its current quarter. It also said it is on target to bring down its operating costs to £1billion a year by March 31. It expects its net debt at this time to be within the previously stated range of £2.7 billion - £3.2 billion.

Marconi will publish Q4 results on April 25.

Shares of Marconi fell as much as 9.6 pence to 8.4p today, valuing the company at £234 million. That compares with a £34 billion valuation on September 4, 2000. ®

Related Story

Marconi axes 4,000 more workers
Marconi loses £5bn on grim trading
Marconi and Nortel forced to pull out of Formula One
Marconi shares 'worthless'
Marconi saga ends as Hurn and Simpson quit
Moody's Blues knacker Marconi shares
Marconi AGM kicks off; Simpson holds firm
Oracle aided Marconi collapse
Marconi drops even further; everyone suffers
Massive fall-out from Marconi share collapse