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MandrakeSoft shakes off bankruptcy

Stephen Shankland CNET News

Published: 31 Mar 2004 09:10 BST

A French court has approved MandrakeSoft's plan to exit bankruptcy protection, in a boost that accompanies a return to profitability for the Linux seller.

The court approved a plan under which liabilities of 4.1m euros (£2.2m) will be repaid to creditors over a nine-year period, MandrakeSoft said on Tuesday.

The plan was made possible by a return to profitability in the fourth quarter of 2003, its first since 1999, the company said. MandrakeSoft reported a profit of 270,000 euros on revenue of 1.42m euros for the quarter.

MandrakeSoft is based in Paris, but much of its revenue stems from North American sales. The company's version of Linux is included on some Hewlett-Packard PCs, though that deal will be succeeded by a broader pact with Novell's SuSE Linux, which is the No. 2 version of the open-source operating system after Red Hat.

Red Hat stock was trading on Tuesday near a new 52-week high of $23.95 after the company reported profits and strong growth in new subscriptions.

By virtue of the open-source programming movement's cooperative nature, improvements to Linux made by one company, such as Red Hat, also help others.

MandrakeSoft in January filed for "redressement judiciaire," the French equivalent of bankruptcy protection, shortly after it pleaded for cash from customers. The company had hoped to exit bankruptcy protection by the end of 2003.

The company plans to release Mandrakelinux 10.0 Official in May, it said.