Is Aifotec in a Jam?
The company is attempting to re-invent itself as a developer of more advanced optical components, having run up big debts making what its attorney, Thomas Breymann, now describes as “me-too products.”
It’s found an unidentified venture capital company willing to stump up some cash, but the VC is insisting that most of its money should be spent on forward-looking business, not on paying off Aifotec’s existing creditors.
As a result, Breymann has written to Aifotec’s creditors (Light Reading being one of them) offering them a deal -- payment of only 25 percent of any bills worth more than €1,000 (US$893), and staging those payments over as much as two years in some cases.
Aifotec needs to get creditors to sign a “deed of agreement” accepting the deal by next Monday, November 12, for the VC to go ahead. If this isn’t forthcoming, Aifotec “will probably have no choice but to file for insolvency” in December, according to Breymann’s letter.
The letter goes on to say: "Facing the present situation of the company, it is very likely that you won't receive a quota on your claim since you are a deferred creditor and the assets are not sufficient to satisfy those claims." In other words, creditors are being told it's 25 percent or nothing.
Aifotec already has halted production and laid off 60 percent of its staff, bringing the total number down to 80. It also sold its 1x2 optical switch product line to FCI Fiber Optics for an undisclosed sum. The switch was only announced a couple of months ago (see Startup Moves Fibers, not Mountains).
All of this appears to contradict some of the information on Aifotec’s Website. It still lists job openings in Munich, Berlin, and Middletown, Pa., the company’s three sites. It also says Aifotec’s “financial backing comes from a well-endowed holding.” This is Egora Holding GmbH, also of Munich, which probably is well-enough endowed to pick up Aifotec’s bills.
Egora has a large shareholding in ADVA AG Optical Networking (Frankfurt: ADV), a metro DWDM equipment manufacturer. Egora also has significant stakes in 10 other high tech companies, including AMS Technologies Group from which Aifotec was spun off; Elforlight Ltd., an English solid state laser manufacturer; and Quake Technologies Inc., a fabless semiconductor company colocated in Ottawa and San Jose, Calif. (see Why Cisco Likes Quake).
Aifotec itself is pinning its hopes on getting VC money to continue developing “fiber grating lasers” as the starting point for making integrated modules like transmitters.
The idea of fiber grating lasers is pretty nifty. The back end of the laser is in the form of a standardized semiconductor; the front end, where the light is bounced back, extends into a piece of fiber. This is actually a fiber Bragg grating, which acts as a filter, controlling the wavelength of light coming out of the assembly (for more on the subject, see Fiber Bragg Gratings (FBGs)).
This has the advantage of keeping costs low, because the semiconductor part can be mass manufactured, while providing a very stable, clean light signal. It also makes it much easier to develop arrays of lasers on the same chip, because there’s less problem with heat influencing adjacent devices, according to Thomas Sommer, Aifotec's product marketing engineer.
Aifotec isn’t alone in developing these types of lasers. K2Optronics Inc. is working on something similar (see K2 Claims Laser Record). Cirrex Corp. also has something in the works: Read more about it in an upcoming article.
— Peter Heywood, Founding Editor, Light Reading