Marconi sells £121m Hotpoint stake

TELECOMS equipment maker Marconi has sold its stake in the Hotpoint kitchen appliances business for £121m cash and should now hit its target of generating £500m from disposals to help cut debt.

The sale of its 50% stake in General Domestic Appliances, where the company was partnered with America's General Electric, brings the total raised from agreed asset sales since it set the target in September to £531m. The company, struggling to cut its £4.2bn debt while coping with a continuing slump in its core communications equipment business, said the latest sale, to Italy's Merloni, is expected to be concluded in the first quarter next year.

Marconi will take a last £23m special dividend from the business before the deal goes through. It wants its debt down to between £2.7bn and £3.2bn by March with asset sales paying for half of the planned £1bn reduction, and operating cashflow accounting for the remaining £500m.

On Thursday Marconi spent about £75m buying back and cancelling £150m of its bonds. It also sold its petrol pumps business for £225m.

Marconi shares rose 5.4p to 39p. The group's third-quarter trading statement is expected on 15 January.