Marconi repurchases some 10% junior notes, will redeem others

New York, Dec. 23 Marconi Corp. plc said that it had it had purchased $17.6 million principal amount of the company's 10% guaranteed junior secured notes due 2008 in open market transactions for a total cash outlay, excluding accrued interest and fees, of $19.4 million in open market transactions. The repurchased notes will be cancelled within 90 days and may not be re-issued or resold to any third party.

Marconi said it may purchase additional junior notes or its senior notes in the future.

Marconi also gave notice to the owners of its junior notes that $51.6 million principal amount of the notes will be redeemed on Jan. 12 at a redemption price of 110% plus 72 days of accrued interest, up to the redemption date.

Marconi, a London-based international communications equipment maker, said that in line with the mechanism used for the previous partial redemptions of the 10% notes, which took effect on July 31, Sept. 30, Oct. 17 and Dec. 2, respectively, a pool factor will be applied to every holding. The company will announce further details once the pool factor has been confirmed by the registrar.

Marconi said that this partial redemption - which is mandatory under the provisions of the notes' indenture - has primarily been made possible by a reduction in the amount of cash collateral held against certain bonding facilities following agreement with one of its performance bonding providers, as well as the expiration of certain other performance bonds and letters of credit. Marconi said that it will disclose the balance of cash collateral relating to performance bonds as of Dec. 31 when it publishes its third-quarter results.

Marconi originally issued $487 million of the 10% notes upon completing its reorganization in May. It has now repurchased or redeemed a total of $249.6 million principal amount of the notes, reducing the currently outstanding principal amount not already owned by Marconi to $237.3 million as of Dec. 23. After the fifth partial redemption is completed on Jan. 12, 2004, the outstanding principal amount will be further reduced to $185.7 million.

The registrar, depositary and paying agent for the redemption transaction is The Bank of New York, in London (contact Emma Wilkes at +44 20 7964 7662).

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