The Lightwave Blog

Posted by Stephen Hardy

PLC-based optical components and technology supplier Gemfire has asked its employees to go on a two-week vacation while it attempts to replace the funds a skittish investor decided not to provide.

According to company CEO Rick Tompane, a new investor that had been lined up before the stock market crash decided to pull back its offer. Meanwhile, a couple of large customers pushed out their receivables. The combination of the two events has led the company to suspend operations for two weeks while it looks for a new source of funding.

Tompane says that in informing his customers of the situation, several offered to participate in a bridge loan that would get Gemfire through its current difficulties. He described himself as "pretty optimistic" that such a customer-generated loan will be successfully put in place sometime next week, which is when the two-week suspension is scheduled to end.

Meanwhile, Tompane revealed that competitors had approached him about acquiring Gemfire. He said that no active discussions along these lines are currently underway, although that might change if the bridge loan fell apart or didn't meet the company's long-term needs.

As for the company's current investors, Tompane says they are not currently part of the bridge loan effort. He declined to speculate whether they would be willing to make up the difference if the bridge loan fell short of requirements.

The current hiatus caused considerable uproar in Scotland, where Gemfire has a plant in Livingston (see a BBC story here and a story from the Daily Record here). Tompane says that UK labor law doesn't allow the "two week vacation" option; the only way to temporarily suspend operations is to shut down the plant, then attempt to recall the workers later. Gemfire would reopen the facility should it succeed in gaining the additional funds.

Labels: Gemfire