Struggling UK telecoms giant Cable & Wireless has shuffled the management of its loss making corporate telecoms unit, C&W Global.

There seems to be a continuing catalogue of bad news

C&W shareholder

But analysts remained doubtful about whether the move would satisfy shareholders, who have been calling for C&W's group chief executive Graham Wallace to resign.

Investors pushed C&W's share price down for a second day following news that the firm had sought a �1.5bn ($2.4bn) loan guarantee after receiving a "junk bond" ranking from credit ratings agency Moody's.

C&W's shares closed 14% lower on Tuesday at 41 pence; the previous day they lost 43% of their value.

The rapid fall in C&W's value over the past couple of days means the company is likely to be relegated from the FTSE 100 index of leading UK shares.

The latest reshuffle in the FTSE 100 will be announced on Wednesday, but is based on Tuesday's closing prices.

Restructuring

C&W is in the middle of a major shake up at C&W Global, involving cutting 3,500 jobs and closing 23 of its 42 data centres.

The changes announced by its parent firm on Tuesday aim to improve supervision of C&W Global, where restructuring is costing �800m.

Mr Wallace will reportedly become more involved in reshaping the US business.

Two key senior executives are to report directly to him, according to Reuters news agency. They are C&W Global chief executive Don Reed and C&W America chief executive Simon Cunningham.

Responsibility for the global business outside the US will be taken by C&W's director of group strategy, Adrian Chamberlain.

C&W Global's top financial officer Donald Muir will also to report directly to his group-level counterpart, C&W finance director David Prince.

Expensive 'junk bonds'

Moody's slashed C&W's credit rating to "junk" because of uncertainties about the group's financial liabilities.

The decision forced C&W to find �1.5bn to honour a clause in its deal with Deutsche Telekom dating back to 1999, when it sold the German group 50% of its mobile operator One2One.

Under that deal, C&W promised that if its credit rating fell it would set aside �1.5bn to cover any tax liabilities that could arise.

Press reports on Tuesday cast further doubt on C&W's financial stability.

Citing a confidential internal company report, the Financial Times said tougher competition threatened to hurt income from the group's Caribbean operation.

The Caribbean operations generated about one third of C&W's total revenue in the six months to 30 September 2002.

'How not to run a business'

In response, a C&W spokeswoman said: "Competition is being introduced into most of our Caribbean territories."

"(It) is nothing new for us. It's something we're managing and we're responding to."

But shareholders remain concerned: "It's a text book example of how not to run a business," an unnamed C&W shareholder told Reuters.

"There seems to be a continuing catalogue of bad news," he added.

"Yesterday there was the credit downgrade and the issue of �1.5bn, now there's the revelations that its one so-called secure business - the Caribbean operation - is not as secure as it appeared to be."

C&W's shares were lower by 8.25 pence at 49.5 pence at 1515 GMT on Tuesday.