Management at SMF Technologies, the troubled Limerick company which has secured special dispensation to delist from the Irish Stock Exchange at short notice, is examining a management buyout of its business.

Managing director Mr John McDonnell and consultant Mr Gary Carroll have agreed to pay €50,000 for the outstanding trading businesses of the group, which makes specialist electronic measuring instruments, as well as repaying a debt of €186,000 to a company owned by SMF's largest shareholder Mr Martin O'Donoghue.

SMF has been surviving on the strength of a loan provided by Mr O'Donoghue, who owns 32.4 per cent of the stock, since August 2001. However, following the collapse of a move to make an acquisition earlier this year, Mr O'Donoghue made clear that he could not continue to underwrite the company. The acquisition fell through because the company, capitalised at around €2 million, could not raise the necessary capital.

Since then, the company has been examining its options and has now decided to sell its trading business to Mr McDonnell, subject to approval at an extraordinary general meeting.

If the MBO proceeds, the company will be left with cash of around €10,000. A statement issued by the company yesterday said it had received several approaches from companies interested in using the company as a shell.

The company has yet to start negotiations on the issue but has decided to allow between three and six months for their completion.

In the event that such talks come to nothing, the board has informed shareholders that it will hold a second extraordinary general meeting to consider putting the company into voluntary liquidation.