Pain for Marconi investors

Marconi shareholders were today told they may be left with less than one per cent of the troubled telecoms group in its long-awaited financial restructuring.

Company executives and creditors owed £4 billion are reported to have spent last night negotiating final terms of the overhaul, forced on the company by its disastrous acquisitions spree and collapsing sales of telecoms equipment.

Officials warned that investors in the company, born out of GEC, would experience a "very substantial dilution" of equity value, according to reports today.

It is understood that existing shareholders will not be able to vote on the package.

Under the refinancing, a syndicate of 31 banks owed £2.3 billion by Marconi are expected to write off about £1 billion of those loans, while bondholders owed £1.7billion are also expected to sustain heavy losses.