Telecoms equipment maker Marconi Corp has reassured investors that third-quarter sales will beat the preceding three months, after it unveiled a US disposal that will help cut its interest burden.
Marconi shares, which spiralled down in 2001 after a collapse in its core market, were 5.2 per cent higher at 628 pence in morning deals on Tuesday, off highs of 650p, and valuing the firm at around £1.26 billion. It was once worth as much as £35 billion.
Chief executive Mr Mike Parton told reporters that Marconi remained comfortable with its November guidance that it would report a slight increase in third-quarter sales, but said it would give more details on current trading on January 27th.
The firm reported sales of £389 million in the second quarter to September 30th.
Marconi has been forced to sell off units, cut 6,000 staff and strike a restructuring deal that handed 99.5 per cent of the group's equity to its creditors. It is selling non-core businesses in a bid to pay down its debt pile.
On Monday, it sold its North American Access (NAA) business, which provides high-speed communications services, to California-based Advanced Fibre Communications for $240 million.
The NAA business posted an operating profit before goodwill amortisation and exceptional items of around £3 million on sales of £55 million for the six months to September 30th, 2003.
Mr Parton said Marconi would use the proceeds from the deal, expected to close in the first quarter of 2004, to pay off all its junior notes and a small portion of its senior debt.
The company said it hoped to pay down $185 million of junior notes on which it pays 10 per cent interest a year. It will also repay $33 million of its senior debt, on which it pays 8 per cent interest a year. Marconi said it would be left with gross debt worth $684 million.