Marconi shareholders have been offered a long-awaited apology from the crisis-hit company, but warned they have very little chance of gaining any financial compensation.

No-one gave me any hope that we could recover something

Derek Bonham, Marconi chairman

Chairman Derek Bonham, brought in a year ago to try and rescue the ailing telecoms equipment maker, expressed "sincere regret" for the company's troubles.

Marconi shareholders reacted angrily to news that the restructuring deal to save the company from collapse would leave them with just 0.5% of the company.

But Mr Bonham said the "debt-for-equity" swap with banks and bondholders was the best possible option for the company and its shareholders.

Only option

Marconi agreed its refinancing deal in August, after seeing its debts spiral to £4bn after overspending in the tech boom.

However, the deal means the company is effectively placed in the hands of banks, creditors and bondholders.

Mr Bonham told shareholders at the company's Annual General Meeting that "we tried not to leave any stones unturned," in the search for a solution.

He added that he was "deeply disappointed for not being able to rescue (the company's) share price for you".

But he said the refinancing was "the best outcome for the survival of Marconi, its shareholders, employees, customers and suppliers".

Marconi's shares plummeted to just 1.7p before the deal was announced, against a peak of £12.40 during the tech boom of 1999.

No chance

Mr Bonham also dissuaded shareholders from taking legal action against the company's former management.

Chairman Derek Bonham apologised to shareholders

Irate shareholders had been calling for compensation from current and former directors, including former chief executive Lord Simpson and finance chief John Mayo, suggesting they had brought the company to near collapse.

But Mr Bonham said his enquiries to lawyers both in the US and in the UK led him to believe their efforts to prove "impropriety or negligence" would be in vain.

"No-one gave me any hope that we could recover anything from these deals," said Mr Bonham.

New start

The restructuring has yet to be finalised but should mean the creation of a new company, Marconi Corporation, in January.

The chairman said the group had not lost any major customers and had held on to big names including BT and Vodafone.

Shareholders were also angry at payments made to directors when they left.

Lord Simpson was given a £300,000 pay-out, while John Mayo received over £1m.

"I was disappointed I could not do a better deal with Lord Simpson," said Mr Bonham.