Marconi settles its debts
Published: 06 Sep 2004 12:15 BST
Marconi has cleared off the last of the $1.2bn debt left after its financial rescue 16 months ago.
The telecoms equipment company has paid off the debt four years ahead of its 2008 deadline and is still left with £300m in cash. The company is not the only one with cash -- chief executive Mike Parton cashed in £5m worth of the bonus he was given for clearing the first £300m of debt last month and two other directors raised £4m.
Parton said in a statement that the move would cut $100m a year in interest charges from the company balance sheet. He has overseen the sale of almost £500m worth of assets on the way to eliminating Marconi's borrowings.
Marconi is on the way to turning in a profit of £30m this year. Three years ago the company nearly collapsed under £4bn worth of debt that it had taken on to help fuel its dot-com boom. Much of that debt was related to the acquisition of Fore Systems.
The rescue plan left shareholders with almost nothing and effectively turned the company over to its creditors. Most of the individual shareholders had bought their shares in the glory days of chairman Lord Weinstock, who was financially prudent and sat on a cash mountain for years.
A Marconi spokesman said that the company has no plans for its cash at the moment and added that it needs to be able to fund a couple of years of research and development if necessary.
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