NEWS 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 -- CEO 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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1. Neil Postlethwaite
If Marconi are doing so well, maybe they can fund a compensation scheme for everyone else who got screwed in the Debt Restructuring a couple of years back, or lost their shirts on Marconi shares after its crazy 'global player' tech restructuring from GEC as it was.
Bet the directors are getting a huge bonus though !!!! That comforts me.
2. Richard
I'm Wearing my Fore Tee Shirt!
"... or lost their shirts on Marconi shares."
Marconi's troubles hit my already tiny frozen pension.
However, because I've been out cutting the grass I'm actually wearing my Fore Tee shirt. It dates from their glory days. At least I still have something useful.
Shame about the ill advised former management who left with such rich rewards.
PS. My collection includes Baltimore pens. (Which later became worth more than Baltimore shares.) Perhaps we should start a museum of Hi-Tech Industry, charted by such items?