THE three venture capital companies which backed the flotation of Northern Ireland electronics company, BCO Technologies, have increased their combined stake from 49.8 per cent to over 54 per cent after investing £593,746 sterling (#867,289) for an additional five per cent of the equity.
The investment by 3i, ACT Development Capital and Enterprise Equity is part of a fundraising aimed at moving BCO towards a breakeven position, and is in tandem with a programme of cost containment and improvement in margins.
BCO indicated last December that it expects a trading loss of at least £4.5 million sterling. "This remains our expectation," the chairman, Mr Dermott Simpson, said in a statement.
As well as the increased investment by the three venture capital shareholders, BCO will get a further injection of equity capital in the next four months when some of its existing lease finance is converted into about 5 per cent of the equity - around £590,000 at the current share price.
"This will amend the terms of leasing to reflect a significantly lower finance cost to the company of our largest line of credit," Mr Simpson said.
In addition to the financial restructuring, the BCO boardroom has also been reshaped with the resignation yesterday of the marketing director, Mr James Corkery. BCO intends to recruit a chief operating officer as soon as the later funding is put in place.
BCO raised £10 million in 1997 when it was floated on the AIM market in London and the DCM market in Dublin at 140p sterling a share.
The shares originally rose as high as 238p sterling but, as the trading performance deteriorated, fell as low as 661/2p sterling - the price at which ACT, 3i and Enterprise Equity have provided additional equity funding this week.
