Reorg and Corporate Action Team QUESTIONS AND ANSWERS. Regarding Bondholder Vote by former or existing bondholders of

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1 Reorg and Corporate Action Team QUESTIONS AND ANSWERS Regarding Bondholder Vote by former or existing bondholders of Marconi Bonds: The Eurobonds 500,000, % Bonds due ,000,000, % Bonds due 2010 ISIN: XS ISIN: XS The Yankee Bonds US$900,000, % Bonds due 2010 US$900,000, % Bonds due 2030 ISIN: US566306AC07 and CUSIP: ACO ISIN: US566306AD89 and CUSIP: AD8 ISIN: US566306AA41 and CUSIP: AA4 ISIN: US566306AB24 and CUSIP: AB2 Recommended Voting Form Deadline Date: September 22, 2006 General Please read the enclosed Chairman's letter, which explains the reasons behind the request for a bondholder vote. "Definitive Holders" who have valid claims against Marconi arising out their ownership of Marconi Bonds are being asked to vote to amend the Marconi plc Scheme (a scheme is like a US Bankruptcy plan of reorganization) to take steps, which are expected to reduce administrative costs and increase the payout to themselves and other creditors. Over 98% of all bondholder claims have already been admitted under the Marconi plc Scheme. To become admitted, bondholders (through their participants) would have (since March, 2003): (i) blocked their bonds at either DTC, Euroclear or Clearstream and (ii) been named as the "Definitive Holder" on an Account Holder Letter received by Bondholder Communications Group (BondCom). The names and addresses of all Definitive Holders are on file with BondCom. It is BondCom s responsibility to maintain the list, including the bondholders names, addresses and amounts of their claims. Definitive Holders named on the admitted list will shortly receive (directly from BondCom) an envelope containing: o Voting Form o Explanatory Statement o Letter from the Chairman o If the Definitive Holder is listed at an Italian address, an Italian version of the Letter from the Chairman. 1

2 QUESTIONS AND ANSWERS Why is this vote being undertaken? One of the main reasons of the proposal is to hopefully increase the distribution of money to plc s Admitted Scheme Creditors. On 19 May 2003, a scheme of arrangement proposed by Marconi plc (now known as M (2003) plc) ( plc ) became effective. Accordingly, plc ceased to be the ultimate holding company for the Marconi group and became, in effect, a stand-alone entity with no connection to Corp or the Marconi group. plc has explored a number of options for minimizing the ongoing administrative costs of plc prior to termination of the plc Scheme. The option plc believes will deliver substantial cost savings involves plc being placed into members voluntary liquidation prior to termination of the plc Scheme (the Proposal ). The principal aims of the Proposal are to: (a) minimize, and in some cases eliminate, some of the costs of maintaining plc in existence until termination of the plc Scheme; (b) maximize the return to plc s Admitted Scheme Creditors under the terms of the plc Scheme; and (c) alleviate some of the confusion caused by plc being required to distribute its annual audited accounts to plc Shareholders of which there are approximately 200,000 in circumstances where the shareholders no longer have an economic interest in the company following the implementation of the plc Scheme on 19 May The proposed Amending Scheme will become effective and legally binding on plc and all Scheme Creditors in accordance with its terms if: (a) at the meeting of Scheme Creditors a majority in number representing three-fourths in value of Scheme Creditors present and voting, either in person or by proxy, approve the Amending Scheme; and (b) the Court s order sanctioning the Amending Scheme is sealed and a copy of it is delivered for registration to the Registrar of Companies in England and Wales. If voting materials are being mailed directly to Definitive Holders, why are corporate actions staffs of DTC, Euroclear or Clearstream participants receiving this FAQ? It s possible that questions will arise and bondowners will ask the reorg or corporate actions team of their original DTC, Euroclear or Clearstream Account Holder. We wanted you to know what was going on. We also wanted to give you answers to questions, which are likely to arise. Of course, not all questions can be anticipated. Therefore, we invite you to contact Annie Jameson (in either London or New York) at the contact details shown on the back page of this FAQ. In some cases, the voting forms are being mailed to the bank or broker (i.e. the Account Holder) through which the bonds were held. Why is this? Some DTC, Euroclear or Clearstream Account participants indicated to BondCom that mail intended for their clients should be addressed to them. BondCom is simply using the addresses, which it was provided before. How do I know if a client s bond related claims have been admitted (i.e. The bonds have already been blocked and Account Holder Letters have already been submitted on the behalf of the ultimate beneficial owner)? If you are unsure whether an Account Holder Letter with respect to the bonds you or your customer(s) held as of the Record Date (27 March 2003), has been admitted, please contact Annie Jameson of BondCom (at the details at the end of this letter) to ensure that your customers can vote on the Amending Scheme. 2

3 Who are the beneficial owners eligible to participate in the vote on the Amended Scheme? Bondholders named as Definitive Holders in duly completed Account Holder Letters that are on file with BondCom are permitted to vote. In some cases your or the custodian bank s details are listed in an Account Holder Letter as the Definitive Holder (instead of your customer s details). In those cases you/the custodian bank are recognized as the Definitive Holder. You or the custodian bank (as the case may be) will need to complete the Voting Form. Alternatively, your client can complete the Voting Form in their own name in which case we will require you to confirm to us in writing that the client named on the face of the Voting Form is now the Definitive Holder for the purpose of the Marconi Schemes of Arrangement. All Definitive Holders are being asked to vote DIRECTLY to approve or reject the Amending Scheme and reply by sending their Voting Forms to BondCom as per the instructions on the Voting Form. The name and address of the Definitive Holder admitted by the Supervisors of the plc Scheme and the amount of the Scheme Claim have been pre-printed on the Voting Form. The information has been taken from the Account Holder Letter submitted in the plc Scheme. To whom will Bondholder Communitions Group mail the voting forms for the bondowners who have been previously identified? BondCom has mailed the relevant materials directly to your customers (the Definitive Holders ) at the addresses supplied on the original Account Holder Letter (for the Definitive Holder ). However we would recommend you check your files to make sure that the Definitive Holders are aware of the Amending Scheme and the steps they need to take. For the convenience of banks and brokers, the Amending Scheme document, the Voting Form and Explanatory Statement and other relevant documents are available on the website Should I send copies of the ballot, explanatory statement and chairman s letter to my customers (if their names and proper addresses are not on BondCom s official list)? Yes. Remember that BondCom has mailed the materials to the Bondholders at the addresses YOU gave us. If you gave us the address of your broker/bank (but not your client).then it is likely that your clients will not receive the materials unless you forward them to your client. You can either request an appropriate number of copies of the material from Annie Jameson of BondCom, or you can supply BondCom with your clients proper addresses (and BondCom will mail directly to them). What should you do if you (or your client s) details or status has changed since they have blocked their bonds and submitted an Account Holder Letter? If the Definitive Holder named on the pre-printed form has transferred its rights to one or more parties, the relevant party will be required to complete a Voting Form and you will be required to confirm to us in writing that the person named on the face of the Voting Form is now the Definitive Holder for the purpose of the Marconi Schemes of Arrangement. 3

4 Who is authorized to sign and transmit a voting form? All Definitive Holders who have been admitted as Scheme Creditors are being asked to vote DIRECTLY by sending their Voting Forms to BondCom as per the instructions on the Voting Form. Over 98% of all bondholders claims have already been admitted under the Marconi plc Scheme. To become admitted, bondholders (through their participants) would have (since March, 2003): (i) blocked their bonds at either DTC, Euroclear or Clearstream and (ii) been named as the Definitive Holder on an Account Holder Letter received by BondCom. The names and addresses of all Definitive Holders are on file with BondCom. It is BondCom s responsibility to maintain the list, including the bondholders names, addresses and amounts of their claims. How should voting forms be sent to Bondholder Communitions Group? Your customers (i.e., the Definitive Holder or an authorized representative on its behalf) must provide their vote DIRECTLY to BondCom via the completed Voting Form by one of these means: Fax to +44 (0) of a PDF scan to Ajameson@bondcom.com, or Hard copy When must voting forms be received by Bondholder Communications Group? Voting Forms must be returned to BondCom for receipt by September 22, (12:00 noon London Time). When is the Final Vote Being Held? The final vote will be taken at a Scheme Meeting in London on September 25, By September 22 nd, Definitive Holders should indicate on the Voting Form the manner in which they will vote, namely: Direct the Chairman to vote on their behalf (for or against), or Attend the meeting themselves, or Appoint someone to act as their proxy to attend the meeting and vote. What if I (or my client) lose a voting form? Please contact Annie Jameson of BondCom at the contact details provided below. What should I do if I (or my clients) want to alter the details on my clients' voting form? If the Definitive Holder named on the pre-printed form has transferred its rights to one or more parties, the relevant party will be required to complete a Voting Form and you will be required to confirm to us in writing that the person named on the face of the Voting Form is now the Definitive Holder for the purpose of the Marconi Schemes of Arrangement. Will money be distributed to my clients (i.e., the admitted Scheme Creditors)? If there is a vote in favor of the Amended Scheme, it is possible that, in due course, additional money may be distributed. However, there is no guarantee that this will occur. 4

5 Will this voting process impact on the amount of money to be distributed to creditors? It is the opinion of the Supervisors that (i) a members' voluntary liquidation before the Termination Date will serve to optimize the returns to Scheme Creditors, (ii) the amount available to be distributed to Scheme Creditors at the Termination Date would obviously be considerably greater, if a members' voluntary liquidation could be effected and costs such as the mailing of accounts and notices for the AGM could in future be avoided. What if clients bonds are not yet blocked or an Account Holder Letter has not yet been submitted on behalf of a client? If an Account Holder Letter has not previously been submitted on behalf of your client he/she will not be entitled to vote at the Scheme Meeting. In order to have his/her Scheme Claim Admitted for the purpose of voting, you as a direct clearing system participant, through whom the Bonds are held, will first need to: (i) properly deliver your blocking instructions in respect of the bonds held via Euroclear or Clearstream, and a DWAC instruction in respect of any bonds held via DTC and (ii) submit a duly completed Account Holder Letter (through Voting Forms must be returned for receipt by BondCom by September 22, (12:00 noon London Time). Therefore, bonds should be blocked, and Account Holder Letters should be submitted well prior to the submission of a voting form. Where can I get more information? Information can be obtained during normal business hours from Annie Jameson of BondCom at the following locations: London Office: 1 st Floor, 28 Throgmorton Street London EC2N 2AN United Kingdom Telephone: Fax: Bondholder Communications Group Attention: Annie Jameson ajameson@bondcom.com Website: New York Office: 30 Broad Street, 46th Floor New York, NY USA Telephone: Fax: