SCO secures $50 million in financing

The SCO Group has received a $US50 million private investment from a group led by BayStar Capital.

The private investment will aid SCO's financial position and help it carry out plans including new partnerships, development of its Unix and SCOx Web Services products, and enforcing its intellectual property claims, according to a statement by SCO.

The vendor pushed back a move to double the price of its controversial Intellectual Property License for Linux until November 1. The company also delayed indefinitely its plans to send invoices to Linux users, which it was to start doing this month.

One analyst said SCO faced tough situations in both its Unix software business and its Web services software initiative. Its efforts to secure license fees from companies using Linux are alienating hardware vendors that might offer its Unix software with their servers, and in Web services it is up against much bigger rivals, said IDC analyst Dan Kusnetzky.

"Any time a supplier has threatened its suppliers and its customers, it's not really a good sign for them going forward in that business," he said.

The financing was structured as a private placement of SCO shares, which are convertible into common equity at a fixed conversion price of $16.93 per share. That's the average closing bid price for SCO's common stock for the five trading days before the closing, according to the statement. After converting, investors will own 17.5 per cent of SCO's outstanding shares, the company said.

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