Massana Group, a handful of interrelated firms which design communication chips, has raised $7.5 million (€7.3 million) to keep it afloat during the technology downturn.
The group, which has raised $31 million in funding since it was founded in 1996, raised the cash by issuing convertible secured loan notes on the back of investment by its existing investors.
By issuing convertible loan notes, the valuation of Massana, and the amount of equity each investor will take in the firm, will only be decided when a new investor takes a stake.
Massana Group's latest accounts show it is currently seeking further funding, about $10 million, from new investors. The new cash would be used to meet Massana's short to medium term business requirements.
The financial accounts for the Massana Group show that it has suffered heavy losses during the most severe downturn in the semiconductor industry.
Massana Design Limited, one of the subsidiary firms within the Massana group, lost $12.7 million last year and had net liabilities of almost $20 million at December 31st 2001. Massana Limited, the holding company of the group, lost $339,999 last year and is owed $17 million from its subsidiaries, its accounts show.
In addition, the accounts for Massana International, one of its subsidiaries, show an excess of liabilities over assets causing the firm's auditor, PricewaterhouseCoopers, to advise in October 2002 that there existed a situation where there should be an extraordinary general meeting.
Mr Paul Costigan, chief executive of Massana, said things were certainly tough but Massana had brought its product to market and was selling in its main markets in the US and Asia. "We are keeping our heads down and we have a very exciting future," he added.
Massana is an innovator of "smart math in silicon" for broadband digital communications. Its technology enables broadband networks to operate more efficiently.
In May 2001 it was named as one of the top 100 emerging technology firms by the technology magazine Tornado Insider.
Its main competitors include the technology firms Broadcom and Marvell, who have both been hit hard by a sharp downturn in demand for communication chips.
Broadcom announced a cut of 16 per cent, or some 500 people, in its workforce last month in an attempt to return to profit after six successive quarters of losses. Massana's workforce now stands at just 50 following a major restructuring earlier this year.
Mr Costigan would not disclose the company's turnover and this figure was not disclosed in its financial accounts because of its small firm status under Irish law.
Existing investors in Massana include Dresdner Kleinwort Capital, JAFCO from Japan, ACT Venture Capital of Dublin, BancBoston Capital in the US, and Vision Capital based in California.
