Private placement volume dips ahead of holiday; Bookham closes $25.5 million deal

By Sheri Kasprzak

Atlanta, Dec. 21 - As some market professionals geared up for time away from the office for the upcoming holidays, private placement volume took a dive Tuesday.

Some sell-siders said the drop in volume could be attributed to companies closing early for the holidays.

"We had pretty good volume yesterday [Monday], but I think issuers are either just getting ready to close for the upcoming holiday or they're busy with end-of-the-year paperwork," said one sell-side source. "I don't expect that volume will be very good for the rest of the week."

"It's definitely related to the holiday," agreed another sell-sider. "Will things pick up after Christmas? I think things will probably improve once the holidays are behind us."

Canadian volume was also sluggish as oil dropped slightly.

"It's a combination of lower oil and the holidays," said one Canadian source. "Energy stocks are down, the holidays are coming up this week, so issuance is going to be down."

Oil prices were down slightly Tuesday, closing $0.02 off at $45.76 per barrel.

In the United States, Bookham Inc. led private placement action with its $25.5 million offering.

The company sold 7% senior unsecured convertible debentures, which mature Dec. 20, 2007. The debentures are convertible into shares at $5.50 each.

The offering also included warrants for 2,001,963 shares at $6 each.

Perseus Group LLC was the placement agent in the deal.

Bookham, based in San Jose, Calif., manufactures optical components, modules and subsystems. It plans to use the proceeds from the offering for general corporate purposes, including the payment of outstanding debt, working capital and restructuring.

The company's stock closed down $0.332 at $4.438 Tuesday.

Image closes offering

Image Entertainment Inc. said Tuesday it sold 2.9 million shares at $5.25 each for $15.25 million.

ThinkEquity Partners LLC was the placement agent in the deal.

"This private placement significantly strengthens Image's balance sheet and allows us to take advantage of new production and program acquisition opportunities," said Image's chief financial officer Jeff Framer, in a statement.

"It's priced in line," said one market source. "Home entertainment companies have been doing well lately and this seems to be a good deal for them, so in terms of whether the sector is appealing, I'd say it is."

Image licenses, produces and distributes DVD and home entertainment products. The company plans to use the proceeds from the offering to pay down outstanding obligations under a credit facility with Wells Fargo Foothill Inc. The remainder of the proceeds will be used for working capital and general corporate purposes.

On Tuesday, the company's stock closed down $0.69 at $5.26.

Delta Systems raises $3 million

Delta Systems Inc. raised $2,999,700 in a private placement Tuesday.

The company sold 2,727,000 shares at $1 each.

The offering was upsized from a previously announced $2.5 million offering.

An underwriting syndicate led by First Associates Investments Inc. placed the deal.

Delta is a Rogers, Ark.-based automation software company serving the manufacturing and distribution industries. The proceeds from the deal will be used to support the company's operations.

Delta's stock closed up $0.10 at $1.35 on Tuesday.

Rentrak wraps deal

Rentrak Corp. closed a private placement of share for proceeds of $2,773,800.

Mark Cuban, a business owner and owner of the Dallas Mavericks, bought 308,200 shares at $9 each.

Cuban also bought 191,800 shares directly from the company's management, also at $9 per share for an additional $1,726,200.

Rentrak, based in Portland, distributes, tracks and collects data for the home video industry. The company plans to use the proceeds from the financing for working capital, including the development of its business intelligence services.

Rentrak's stock closed up $0.61 at $11.73 on Tuesday.

FastFunds plans $2 million deal

FastFunds Financial Corp. plans to raise up to $2 million in a private placement of unsecured convertible ntoes.

The notes, which bear interest at 9.5% yearly, mature in nine months. They notes are convertible into shares at $1 each at maturity.

The offering also includes warrants for 2 million shares at $2 each for five years.

FastFunds, based in Minneapolis, is a holding company for Chex Services Inc., which provides cash services for casinos and other gaming companies.

On Tuesday, the company's stock closed unchanged at $5.

Far East's $1.5 million offering

Far East Energy Corp. plans to hit the private placement market with a $1.5 million offering.

The company will issue 375,000 units at $4 each. The units include five shares and one warrant.

The warrants allow for an additional share at $1.50 each for three years.

Bathgate Capital Partners LLC is the placement agent in the deal.

"I think it probably could have priced higher," said one market source. "With five shares to a unit, considering where its stock has been trading, it could have done better. With oil prices up and down the way they've been, energy stocks are a little unstable, so that's probably why it priced a little lower than it should have."

Houston-based Far East Energy is a coal bed methane gas exploration and production company with projects in China. The proceeds from the private placement will be used for the exploration of coal bed methane, production sharing contracts in China and working capital.

The company's stock closed unchanged at $1.20 on Tuesday.

Beard to raise $1.5 million

The Beard Co. plans to raise $1.5 million in the private placement of subordinated notes.

The five-year notes bear interest at 12% per year and are convertible into shares at $1 each.

Based in Oklahoma City, Beard is focused on coal reclamation activities, carbon dioxide gas production, the construction of fertilizer plants in China and developing business opportunities through its e-commerce activities.

On Tuesday, the company's stock closed down $0.03 at $0.52.

Canadian deals

Leading action north of the border was Innova Exploration Ltd. with its announcement that it raised C$11 million in a private placement.

The company sold 1,958,903 shares at C$3.65 each and 865,557 flow-through shares at C$4.50.

A syndicate of underwriters led by Jennings Capital Inc. exercised an over-allotment option on the deal for C$3 million.

Innova, based in Calgary, Alta., is an oil and natural gas exploration, development and production company. The company plans to use the proceeds from the deal for its exploration and development activities.

Innova's stock closed down C$0.08 at C$3.65 Tuesday.

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