| PUBLICLY traded Music Semiconductors Corp. will try to raise fresh capital to the tune of $3.5 million, roughly P170 million, in the second half of the year to fund a new product line it plans to market in 2008.
In an interview, president Michael Burton said the company is still finalizing what options to take, although a top consideration may be via a private placement.
“We are hoping to accomplish and get this deal approved by July,” he said.
The company is now in exploratory talks with three local companies and a foreign firm for potential participation in the private placement. A private is the sale of securities to a number of investors that may include large banks, mutual funds, insurance companies and pension funds.
Burton said the fresh capital would be used specifically to fund the production of flex content addressable memory (CAM), a computer chip used by search engines.
“We are currently in the development stage. It would take us at least nine months to one year to finish our study for the product,” Burton said.
The key to Music’s success is its ability to generate at least the same amount of revenue in 2007 as in 2006, in order to fulfill its creditor commitments, to continue to grow its equity, and to be able to attract funds to create new products, according to its executive.
In 2006, the company booked a net profit of P29.8 million versus P14.6 million a year earlier while net sales grew to P183.4 million from P174.8 million in the same comparable period.
“We are comfortable with the direction we are going,” Burton said. “We believe we have a platform to move the company forward.”
Incorporated in the Philippines in January 1992, Music started with two distinct semiconductor product lines as a result of its acquisition of these assets from Music NV, a Dutch company that became its subsidiary.
The first product line, graphics chips for personal computers, had been generating revenue for three years and was profitable. The other product, CAM chips for networking systems, was just entering the market following a lengthy period of development.
By 1994, the graphics chip market had attracted a number of low-cost competitors, resulting in severe price erosion and marginal profitability. This prompted the company to exit this market and focus all resources on the CAM business.
| 
No comments:
Post a Comment