Marconi rights may be on the way

NICE assets - shame about the sales. That is likely to be the City's response today when Marconi takes to the catwalk with its long-awaited trading update.

The struggling telecoms equipment group has made impressive progress towards restoring its balance sheet since September's boardroom coup, when Derek Bonham took over as emergency chairman and Mike Parton as chief executive.

A blizzard of disposals have reduced net debt from £4.4bn towards the £2.7bn target promised. But market conditions remain grim. US industry leaders have confirmed further slumps in sales. The City expects Marconi lost £150m last quarter, traditionally the weakest. Its biggest customers, BT and Telecom Italia, are under heavy pressure themselves.

Robin Hardy, analyst at WestLB Panmure, said: 'We know Marconi has got on top of the debt and it is still pretty grim out there. The big question is: Where does it go from here?' Many expect a £1bn-plus rights issue.