Marconi repurchases some 10% junior notes, will redeem others

New York, Feb. 11 - Marconi Corp. plc said that it plans to redeem $34 million principal amount of the company's 10% guaranteed junior secured notes due 2008 on Feb. 24 at a price of 110 % of the principal amount, plus 24 days accrued interest up to the redemption date.

The redemption will be the sixth partial redemption of the notes by the company since their original issuance.

In line with the mechanism used for the previous partial redemptions of the notes, which took effect on July 31, Sept. 30, Oct. 17 and Dec. 2, 2003 and Jan. 12 2004, a pool factor will be applied to every holding. Further details of the pool factor to be applied from the redemption date will be announced once the pool factor has been confirmed by the registrar for the transaction.

Marconi, a London-based international communications equipment maker, said the latest mandatory partial redemption has primarily resulted from a reduction in the amount of cash collateral held against certain bonding facilities following agreement with a second of the company's major performance bonding providers, a release of collateral relating to a portion of the performance bonds related to supply contracts transferred to Finmeccanica SpA upon disposal of Marconi's strategic communications businesses in August 2002 and the expiry of certain other performance bonds and letters of credit.

As previously announced, besides past mandatory partial redemptions as noted, Marconi said on Dec. 23 said that it had it had purchased $17.6 million principal amount of the 10% notes in open market transactions for a total cash outlay of $19.4 million, excluding accrued interest and fees.

Marconi originally issued $487 million of the 10% notes upon completing its reorganization in May 2003. It has now repurchased or redeemed a total of $295.8 million principal amount of the notes, reducing the currently outstanding principal amount not already owned by Marconi to $191.1 million as of Feb. 10. After the sixth partial redemption is completed on Feb. 24, the outstanding principal amount will be further reduced to $157.2 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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