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Marconi posts $7.4B loss
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November 13, 2001: 4:38 a.m. ET
Troubled telecom equipment maker slashes value of acquisitions, stock falls
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LONDON (CNN) - Troubled telecom equipment maker Marconi posted a huge loss on Tuesday as it slashed the value of acquisitions.
The company made a loss of £5.1 billion ($7.4 billion), or 192.9 pence a share, for the six months to September 30. In the same period a year ago the company posted a loss of 147 million, or 5.4p a share.
Marconi's stock has tumbled more than 95 percent this year as it struggles to slash it debt mountain of more than £4.2 billion. In September its shares were dumped from the FTSE 100 index of blue chip stocks. Its stock fell 3.9 percent to 30 pence in early London trading.
The company ousted its chairman and chief executive in September after Marconi was forced in July to cut its sales targets, which it had stubbornly stuck to even as rivals were reigning in costs and earnings targets.
Like its rivals, Marconi has been forced to slash jobs as telecom operators delay and cancel orders in the wake of a global economic slowdown.
Marconi said market uncertainty had been exacerbated by the September 11 attacks in the United States and said it could not give sales and operating profit forecasts for the full year.
"Market conditions remain difficult with continued uncertainty regarding levels and timing of service provider spending," the company said.
The company wrote off £3.5 billion in goodwill and some fixed assets to reflect the deterioration in its business. In 2000, Marconi was still snapping up overseas businesses like U.S.-based technology firm Mariposa Technology and Italian mobile radio technology firm Telit Networks.
Marconi said it was still in talks with its banks to refinance its loans and was "assessing all options" for future financing. It said it was satisfied it had adequate resources to continue as a going concern.
Marconi's lenders, including high-street banks Barclays and HSBC, have been pushing for renegotiation of an unused  3 billion credit line to include covenants, to reflect the firm's deteriorating fortunes.
However, holders of Marconi bonds are resisting the inclusion of covenants as it could push bondholders back in the queue for assets if the company collapses. 
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