Marconi bags £144m for Hotpoint

12 April 2012

TELECOMS equipment maker Marconi is to sell its 50% stake in the company that makes Hotpoint washing machines for £121m in cash. The firm, which will use the cash to cut debt, will receive a further £23m as a dividend before the sale to Italian white goods firm Merloni goes through.

The group said the deal, coupled with £225m sale of its petrol pump maker unveiled on Thursday, would allow it hit the upper end of its debt reduction target. Marconi currently has debt of around £3.5bn but wants to cut that to £2.7bn to £3.2bn by March. 'We're there three months ahead of schedule,' a spokesman said.

Marconi shared ownership of the Hotpoint maker, General Domestic Appliances, with US giant General Electric Co. GDA employs 7,000 staff in the UK, and is the largest supplier of domestic appliances in the UK market, and the largest service provider for the sector.

It designs, makes and services appliances including gas and electric cookers, washing machines, spin and tumble dryers, refrigerators and gas fires under names including Hotpoint, Creda and Cannon. GDA generated profits of £36m for the year to 31 March.

'The agreement to sell our non-core interest in GDA helps us in our programme to focus on our core communications business,' said Marconi chief executive Mike Parton.

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