The Belfast-based technology group BCO is raising another £1.57 million sterling (€2.41 million) in a placing and open offer which the group says will see it through to profitability.

Three venture capital shareholders who already hold 52 per cent of BCO equity, 3i, Enterprise Equity and ACT, have underwritten a placing and open offer of 3.14 million new shares at 50p sterling each, a 16 per cent discount on the 58p sterling at which the shares were trading before the placing announcement.

In addition, a provider of lease finance to BCO has agreed to convert this into equity equivalent to 6.9 per cent of the enlarged share capital at the same 50p sterling price as the placing and open offer.

When BCO floated on the AIM and DCM markets in December 1997, it had cash of £6.1 million sterling and net assets of £6 million sterling. This financial position has deteriorated rapidly and at the end of 1998, BCO had net cash of £1 million sterling and net assets of £1.5 million sterling. Chairman Mr Dermott Simpson said: "We anticipate this funding package being sufficient to take the company beyond the point of profitability."

Last year, BCO had losses of £4.5 million sterling on sales of £2.3 million sterling, compared to the illustrated loss of £2.4 million sterling and turnover of £4 million sterling in the December 1997 flotation prospectus.

The main factors in the bigger losses and lower turnover are sales to additional customers which will not now begin until the third quarter, once-off costs of £600,000 sterling and also a decision by a major current customer to reduce its purchases from BCO for the rest of the year and also to source supplies from an additional manufacturer in the next six to 12 months.

The new funding is also accompanied by a shake-up in BCO's management, with chief executive Mr Scott Blackstone stepping down to become an executive director with responsibility for customer development and product innovation. Director of marketing Mr James Corkery has resigned and will leave BCO next month, while Mr Michael Black becomes finance director. In addition, BCO has appointed former Amdahl Ireland chief executive Mr Bernie Dillon as a non-executive director.