Shareholders of Marconi will be left with just 0.5 per cent of the equity when it is restructured as a new company, the Sunday Telegraphreported yesterday. A spokesman for the stricken telecoms equipment maker declined to comment on the report, which said shareholders will also be issued with warrants representing 5 per cent of the new equity that can be exercised at a later date, depending on how the firm performs.
Banks and bondholders owed billions of pounds by Marconi have agreed a financial reconstruction of the company, and terms of the deal are likely to be announced when markets reopen on Tuesday, following Monday's bank holiday, the Telegraphsaid.
It said that under the agreement, Marconi was expected to emerge with net debt of £300 sterling - £350 million pounds and cash of about £250 million.
An unmanageable £4 billion pound debt has forced Marconi to surrender control to its bondholders and lenders.
Formerly known as GEC, Marconi collapsed after pricey acquisitions and a move into telecoms equipment manufacturing that came during a fall in demand for the raw materials of the dot-com boom.
The company's shares closed on Friday at 1.9 pence, a fraction of the 1,276p peak reached in 2000.