Marconi considers £1bn rights

MARCONI'S new boss Mike Parton is considering a £1bn rights issue in order to reduce the company's massive debts. Net debt stands at £3.5bn. The group owes £2.5bn to a syndicate of 31 banks led by Barclays and HSBC, and a further £2.25bn to bondholders. It has £1.2bn of cash.

It began renegotiating its bank facilities a few weeks ago and is also examining the option of buying back its own bonds.

Shares in the troubled telecoms equipment group closed last week at 42 1/2p, down from nearly 800p at the start of the year. Analysts said the price would need to rise to at least 80p before a rights issue became a viable option.