SCO secures $50 million in financing

The SCO Group Inc. has received a $50 million private investment from a group led by BayStar Capital, the Unix software company announced Thursday.

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

Also Thursday, SCO pushed back until Nov. 1 a move to double the price of its controversial Intellectual Property License for Linux. The price had been due to double Wednesday. The company also delayed indefinitely its plans to send invoices to Linux users, which it was to have done starting this month.

One analyst said SCO faces 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, the investors, led by Larkspur, California-based BayStar, will own 17.5 percent of SCO’s outstanding shares, the company said.