Marconi repurchases some 10% junior notes, announces further partial redemption

New York, Nov. 19 - Marconi Corp. plc said that it has purchased $5.9 million (about £3.5) principal amount of its $487 million of outstanding 10% guaranteed junior secured notes due 2008 for a total cash outlay, excluding accrued interest and fees, of $6.5 million (around £3.8 million) in open market transactions.

Marconi, a London-based international communications equipment maker, said that under the terms of the notes' indenture, the repurchased notes will be cancelled within 90 days and may not be re-issued or resold to any third party. Marconi said that it may purchase additional junior notes or its senior notes in the future.

Marconi also gave notice to the holders of its 10% notes that $27,833,204 aggregate principal amount of the notes will be redeemed on Dec. 2 at a price of 110% of the principal amount redeemed, plus 32 days of accrued interest up to the redemption date.

The redemption is the fourth since the notes were issued; in line with the mechanism used for the previous partial redemptions of the notes, which took effect on July 31, Sep. 30 and Oct. 17, respectively, a pool factor will be applied to every holding.

Marconi said that 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.

The company said the mandatory partial redemption has primarily resulted from releases of cash collateral following the expiration of certain performance bonds and letters of credit and proceeds from the disposal of its share in Confirmant and completion of its outsourcing agreement with Elcoteq.

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

It said that it has now repurchased or redeemed $204.1 million principal amount of the 10% notes, reducing the principal amount outstanding and not owned by Marconi to $282.8 million (£167.3 million) as of Nov. 18. After the fourth partial redemption scheduled on Dec. 2, the principal amount will be further reduced to $254.9 million (£150.8 million).

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