Mandriva in danger of closing its doors

The French Linux vendor is suffering from a lack of needed capital

>Signs are not good that Mandriva will be continuing much longer in its current state.

That's the news coming out of France this week, as rumors and vague confirmations point to the French Linux company possibly shuttering its doors on January 16. The reason? An apparent shareholder fight that is blocking an influx of much-needed capital.

Mandriva S.A. hasn't had an easy time of it, even after emerging from bankruptcy in 2006. Formerly MandrakeSoft, the company merged with Brazilian Linux vendor and former UnitedLinux partner Connectiva in 2005.

Even as the Mandriva releases received fairly positive reviews, the company never seemed to have much of a direction, and it's developer community continually declined in strength. The company's decision, for whatever reason, to let founder Gaël Duval go alienated the Paris-based company from its development community. The popularity of Ubuntu on the desktop and the one-two punch of Red Hat and SUSE on the server side has also put a strong squeeze on Mandriva.

In 2011, there were rumors that French open source firm LINAGORA would be acquiring Mandriva, but those rumors turned out to be just that.

Today, other investors in Mandriva seem to be causing more headaches for the beleaguered company.

Here's what is known: on December 30, Rapahël Jadot, a veteran contributor in the Mandriva community, posted a notice within the Mandriva forums indicating that trouble was indeed afoot.

"Well, let's make it short: everything was fine, but there is a big problem: a minor shareholder (Linlux) refuses the capital injection required for Mandriva to continue, even though the Russian investor had offered to bear it alone.

"Except turnaround Mandriva should cease activity Jan. 16…"

It is not clear from the community chatter what exactly is going on, but it appears that Linlux SARL, a minority shareholder in Mandriva with 42 percent of the shares, is blocking a move to raise new capital for the company. Townarea Trading & Investment Ltd., the majority stakeholder in Mandriva, has approved plans to raise the needed funds of €4 million.

In an open letter to investors, Mandriva CEO Dominique Loucougain outlined the situation. The letter, sent in French, has been posted, and a (rather bad, I have to admit) translation does confirm this investor tussle.

"In less than four weeks, the company may indeed have to file for bankruptcy and cease all activities because the necessary recapitalization has been twice prevented by Linlux SARL, even though Townarea Trading & Investment Ltd, another shareholder, was willing to bear the full cost of EUR 4,000,000," Loucougain wrote.

Townarea, a Cyprus-based investment group that appears to be comprised mostly of Russian investors, seems perfectly willing to move forward and provide the €4 million. But Linlux (formerly Occam Capital) seems intent on preventing the investment. Due to my poor knowledge of French, it is not immediately clear why Linlux is pursuing this course of action, though accusations are flying that Marc Goldberg, the lead at Linlux, doesn't want to see his own investments in Mandriva reduced.

Whatever the motivation, this is not the first time Linlux, nor its previous incarnation as Occam Capital, has attempted to block such investments. Occam was one of the biggest investors involved in pulling Mandriva out of the French equivalent of Chapter 11 a few years back. In the past, the capital has come in anyway.

It is not clear if that will be the case this time.

Since the creation of the community-led Mandriva fork Mageia on 2010, the work done by Mandriva and its community over the years won't be lost. But whatever its name--Mandrake-Linux, MandrakeSoft, or Mandriva--this company has a long and valued history within the Linux community, and its loss should be noted. Mandriva made significant achievements in Linux desktop technology and getting desktop Linux deployed more widely in Europe.

Hopefully the company will pull through again… but signs are not looking good this time.

Read more of Brian Proffitt's Open for Discussion blog and follow the latest IT news at ITworld. Drop Brian a line or follow Brian on Twitter at @TheTechScribe. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.

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