Marconi in swap for Bookham stake

MARCONI has agreed to exchange its optical components business for a 10% stake in fellow struggler Bookham Technology.

Chief executive Mike Parton said the £19.7m paper deal would save cash-strapped Marconi up to £100m over the next 12 months. He said there had been no material improvement in the company's core businesses since its previous trading update. The next one is expected on 15 January.

Marconi is selling a swathe of non-core businesses in an effort to reduce its debt to between £2.7bn and £3.2bn by 31 March. Parton said he remained confident of reaching that target and of successfully concluding refinancing talks with the group's banks.

He defended the paper sale to cash-rich Bookham as a medium-term investment that was a play on an eventual recovery of the optical components industry. The business designs and makes light-sensitive switches for optical fibre networks.

Marconi's core optical networks business is unaffected by the deal. Marconi shares fell 2.6p to 39.9p and Bookham rose 16p to 166p.