Revenues at struggling network equipment maker Marconi have halved since last year, and the firm's former chief Lord Weinstock has died.
Marconi revealed the reduced first-quarter sales after selling off subsidiaries and axing more than 3,000 staff.
Group sales during the first quarter were £592m, compared with £1.1bn for the same period last year.
The high debt is a huge problem for Marconi, which is currently trying to restructure and trade its way out of trouble.
Marconi's net debt stood at £3bn at 30 June, up £152m since 31 March.
But the company said that it is continuing to make good progress with its financial restructuring, and is involved in ongoing discussions with its banks and an informal committee of its bondholders.
The firm also again warned that its shareholders will see their stakes further diluted.
It said in a statement: "Marconi confirms that the restructuring process is likely to involve a debt-for-equity swap for a significant proportion of Marconi's indebtedness, thereby significantly de-gearing the group and positioning it to deliver its business plan.
"The board reiterates its previous guidance that it expects a very substantial dilution in value for its existing equity holders."
Marconi said it had continued to suffer as telecoms operators imposed further spending cuts. This was most notable in the US, although there had also been a "significant" softening in Europe - particularly in France and Germany.
The group also admitted that further provisions and write-downs might be necessary at the interim stage because of the decline in demand for telecoms equipment.
Meanwhile, the firm also issued a statement on the death of former GEC Marconi managing director Lord Weinstock.
Derek Bonham, Marconi chairman, said in a statement: "It is with great sadness that we have learned of the death of Lord Weinstock.
"He will be remembered as one of Britain's foremost industrialists who made an indelible impression on both GEC, where he was managing director for some 33 years, and on British business life."
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