Marconi calls in insolvency experts

John Talbot and Chris Hughes will now lead Marconi's crucial talks with banks and bondholders.

Marconi's chairman, Derek Bonham, said: "John Talbot is the person we have been looking for to help us drive the financial restructuring process and lead our negotiations with our bank and bondholder creditors."

Marconi's restructuring talks are expected to result in the group swapping the bulk of its debt for equity.

This would give bondholders control of the company, and shareholders would see their stakes wiped out or virtually worthless.

Fall from grace

At their height, the company's shares were changing hands for £12.50, but the price collapsed last year when the extent of Marconi's problems became known.

After the insolvency experts were appointed, shares fell a further 6% to 6.9p.

Last week, Marconi announced losses of £5.7bn for the 12 months to March - one of the biggest losses in British corporate history.

Marconi, once one of the proudest names in British industry, has hit the buffers over the past 18 months as its main customers slashed their budgets.

Sliding sales

The firm shifted its focus to the telecoms sector during the 1990s, in a highly expensive - and at the time widely applauded - corporate restructuring.

Marconi's latest results showed that its sales were still sliding, sparking renewed fears that its attempts to cut costs and rethink strategy might not be enough to save it.

The company's current financial position is highly complex, mainly because of jostling for position among the many banks, bondholders and investors that have a claim on Marconi's assets.