The company is weighing various options including a preferential stock offering and a global depository receipt (GDR) issue to raise funds within the next six months, according to K Ram Reddy, chief executive officer and chairman of MosChip. The $6-million (Rs 24 crore) company had already raised $7.5 million (around Rs 30 crore) through a GDR issue in 2005.
Moschip is currently in talks with about four companies in the US that are in similar line of business and it would narrow down on two firms for acquisition in part-cash and part-stock deals in six months. The targeted companies have revenues in the range of $7 million (Rs 28 crore) and $10 million (Rs 40 crore), Reddy said, adding "We are still in the red as on last quarter. The new acquisitions are expected to help MosChip achieve a turn around during this year."
Meanwhile, MosChip on Wednesday announced the acquisition of Indigita, the audio-video (AV) division of US-based Intellasys. The deal transaction involves a mix of cash and stock offerings besides royalty payment on usage of technology that comes out of the acquired company's platform over a period of five years.
"This acquisition brought into our fold two products. One of these chip technologies has already been deployed in Japan's consumer electronic major Sony Corporation's Prosumer products. This technology also enabled us to feature in the approved vendors list (AVL) of Sony. We expect this product to add $2 million (Rs 8 crore) to our revenues during this financial year," Reddy said.
