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In 1996, GEC (Marconi''s predecessor) was a £11 billion turnover conglomerate with a £1 billion cash pile. Five years later, the new Marconi, now a global telecommunications equipment company, was almost bankrupt. Its new chief executive, appointed in 1996, had embarked on a dramatic new strategy. The company was transformed into a telecommunications equipment business and most of the other businesses were divested. Acquisitions to build up the telecoms side created a large debt burden. Marconi was late to recognise the telecoms crash in 2000. Its controls failed and the company was slow to cut back. Having run out of cash, the company''s creditors forced a restructuring in which shareholders lost virtually all their money. The teaching note was written by S Hamilton, A Micklethwait and I Moss.