Telecoms group Marconi yesterday predicted its long-awaited restructuring would come into effect by the middle of May.

The forecast comes after the High Court set a date of April 25 for meetings with creditors to consider schemes that would swap £4 billion of debt for cash, loans and shares in the new Marconi Corporation.

If they approve the proposals, which have taken a year to negotiate, shares in the new company would begin trading on May 19 with the first initial distribution to creditors taking place on that date.

Under the schemes of arrangement, creditors would take 99.5 per cent of shares in the new company, leaving shareholders with half of one per cent.

A waiver from the UK Listing Authority means Marconi does not require shareholders' consent for the restructuring.

In a statement, the company said if the restructuring was not approved, the group would have "no reasonable prospect" of avoiding insolvency proceedings, which would mean a lower return to creditors and no return to shareholders.

Marconi also painted a bleak picture of its current outlook - with its core telecoms business set to see sales decline by up to five per cent in the financial year ending March 31, 2004.

The group said a ten per cent contraction in core sales between the first and third quarters of the current financial year would not be offset by a seasonal uplift in the final quarter.