Troubled technology firm Marconi is to sell an optical components business to Bookham Technology.

Bookham, a fibre optics firm with considerable trouble of its own, said it will acquire Marconi Optical Components (MOC) in an all-share transaction.

Marconi will receive 12.8 million shares in Bookham, worth about �19.7m and amounting to a 9.9% shareholding in the company.

Marconi is struggling to rationalise its business and reduce debts of about �3.5bn.

Restructuring

"This agreement is an important further step in the on-going disposal of Marconi's non-core businesses," said Marconi chief executive Mike Parton.

But Marconi will receive no cash towards its debt-reduction plans from the sale of MOC.

Mr Parton's comments suggested Marconi is likely to retain its stake in Bookham as a strategic investment.

"Marconi sees very real value in holding a substantial shareholding in a business that will become a leading provider of integrated photonic solutions worldwide, whilst eliminating Marconi's ongoing investment requirements," he said.

As part of the deal, Marconi has agreed to buy components worth a minimum of �30m from Bookham over the next year and a half, Bookham said.

Losses

Marconi reported a loss of �5.1bn ($7.1bn) during the six months to September, one of the greatest corporate losses in history.

Marconi, a former darling of the FTSE 100 whose share price collapse in July shocked the UK investment community, has replaced directors, shed 6,000 staff and closed sites in a bid to regain profitability.

The firm restated in November that it had been hit by an "unprecedented decline in spending" in its key network infrastructure market.

Marconi shares, which topped �12 last year, were trading at 41 pence in London by 1104 GMT on Monday, down one and a half pence.

Bookham's shares rose strongly, up 23 pence at 170.

Bookham has also seen its share price collapse from a high point of �53.02 last year.