Marconi, the experts and the farce

THE Marconi farce seems to roll on, after months of continually letting the world know it is £3bn down the Swanee and with every broker and financial guru preaching the obvious, they have now called in debt restructuring experts.

Maybe I am a bit naive but what exactly are debt restructuring experts? Is this a new wave of business consultants? It seems Messrs Thomas, Talbot and Hughes have amassed tremendous expertise in resolving many big financial problems.

I would love to be a fly on the wall and see what gems of wisdom they are going to come up with that have not already been suggested by every Fleet Street hack.

I guess you have to understand how the big banks work. If someone owed them £50,000 because they had overstretched themselves in the dotcom boom, the banks would have no hesitation in foreclosing on the house, chucking them out on the streets, selling their assets, getting back £40,000 and writing off £10,000.

But if you owed them £3bn, it is a different ball game - if they write that off, it will whack their balance sheet. The best thing to do is to suggest to the debtor they acquire the services of some recognised insolvency, sorry, debt restructuring experts, so they can read a report that will no doubt conclude the bank accepts an equity-for-debt swap.

Instead of a big write-off, they will now show their newly acquired shares as an asset. It is no good following what brokers and journalists have been saying for the past year. It is much better letting the company run up more debt by paying fat consultancy fees to arrive at the conclusion.

On the Richter scale of back-protecting, it is much better to have a report from a firm of consultants up your sleeve to justify why the executives of the banks accepted the scheme. I mean, you cannot very well say I did it because some bloke in the Evening Standard suggested it was the only way out.

If this was a soap opera made for television, you could see it now. A meeting convened on the first day with the new advisers. Chairman Derek Bonham calls order and makes the formal introduction to the rest of his board members, then sits back waiting for them to pull the rabbit out of the hat.

'Hi, I'm Allen Thomas, best known for my New York City turnaround. I am here to work out how we are going to get some money quickly to reduce the debt. Here's what we're going to do, guys. We're going to put our cards on the table, then we're going to turn one of the water glasses over and each director puts a finger on it. Then repeat after me: 'Millions, are you there?'

'Next, I want my colleagues Talbot and Hughes to hand out black ski masks and baseball bats to four of the board members. Here is a list of Securicor trucks which are in the area over next few days. Go knock them off. You get my drift. Now Del Boy, you take the corporate jet to Colombia and start the cocaine run - don't hide any in the zimmer frame tubes. I love it when it all comes together. You all have a nice day now, you hear?'

Of course, that is a soap opera and a big joke - all you can do is laugh. There is no rocket science in this. When a firm such as Marconi is in trouble, there are few options. Instead of recruiting debt experts, what about bringing in people who know about the electronics and telecoms businesses, people who can innovate and come up with ideas and products that will fill factories and lift sales?

There is too much focus on the finance and not enough on the business, but what can you expect from people who lost the plot a long time ago, spending most of their time with institutions and fund managers instead of on the factory floor or out on their bike selling?

Back to the soap. It is three months down the line and the dynamic trio enquire after the whereabouts of their firm's fees.

Scene 1. Music reminiscent of the song There's a Hole in My Bucket. Enter Allen Thomas to the office of finance director Steve Hare. Thomas: 'Hi Steve, the guys and I wonder what you think of the bills we have put in.' Hare: 'Well, to tell the truth Allen, I quite like the colour of your letterheads and invoices, but in the case of Talbot Hughes I find the typeface a little hard to read.'

Thomas: 'Yes Steve, but I meant what about some payment.' Hare: 'Oh I see, payment. Well do you mind if I ask you a personal question, Allen?' Thomas: 'No, go right ahead.' Hare: 'How old are you?' Thomas: 'I'm 62, why do you ask?' Hare: 'Well, according to your timesheets, you're 136.' Thomas: 'No, come on Steve, stop joshing. When are we getting paid?' Hare: 'We can't pay.' Thomas: 'Why not?' Hare: 'Because we're bloody skint.'

Sir Alan Sugar has donated his fee to charity