Celtic Exploration wraps C$30.75 million private placement; stocks depress volume

By Sheri Kasprzak

Atlanta, May 12 - Celtic Exploration Ltd. led sparse private placement news Thursday as it closed a C$30.75 million stock offering.

The company sold 3 million shares at C$10.25 each.

"It's right in line," said one market source who saw the deal and focuses on natural resources. "Celtic has seen some pretty significant gains for the first quarter and I think that helped with this deal."

According to the company's first-quarter earnings report released earlier this week, Celtic's earnings per share jumped to C$0.11, or 38% more than the same period for 2004.

Even so, the company's stock slipped C$0.15 - after news of the closing was released Thursday morning - to close at C$10.10.

The deal was completed through a syndicate of underwriters led by FirstEnergy Capital Corp.

Celtic, based in Calgary, Alta., is an oil and natural gas development and exploration company. The proceeds will be used for the purchase of oil and gas assets in Alberta.

In the broader private placement market, sell-siders said a dismal stock picture kept volume down in a week that has been defined by significantly lower issuance.

"We just can't seem to win," said one sell-sider, jokingly. "Every time stocks go up, they only manage a little bit of a lift and the next day it seems they're back down. And when they are down, it's more than just a little.

"I'd say issuers are holding off until stocks make a comeback and that may take a while if it stays like this."

On Thursday, the Dow Jones Industrial Average ended the day down 110.77 to close at 10,189.48; the Nasdaq composite index lost 7.67 to close at 1,963.88 and the S&P 500 lost 11.75 to close at 1,159.36.

One Canadian sell-sider said he felt natural resources companies are getting deals out there, so the picture isn't completely bleak.

"There are PIPEs getting done," said the Canadian sell-sider. "I'm not saying they're enormous deals, quite the opposite, but in terms of volume in the big picture, there is a market for small deals."

However, that source was quick to point out that he rarely follows smaller deals.

Lighting Science raises $6.91 million

Lighting Science Group Corp. wrapped up a private placement of convertible preferred stock Thursday for $6.91 million.

The preferreds are convertible into common shares at $0.80 each and pay annual dividends at 6%.

Lighting Science also issued the investors warrants for 6,478,125 shares, exercisable at $0.96 each for five years.

"This capital infusion significantly strengthens our balance sheet and better positions our company to capitalize on the opportunities in the marketplace, while also expanding our institutional shareholder base with the addition of several prestigious investors," said the company's chairman and chief executive officer Ron Lusk in a statement.

Merriman Curhan Ford & Co. is the placement agent in the deal.

Based in Dallas, Lighting Science designs energy-efficient lighting. The proceeds will be used for working capital.

The company's stock lost a penny to close at $1.52 on Thursday.

Glentel arranges C$8.8 million deal

Glentel Inc. announced it plans to head to the private placement market Thursday with a C$8.8 million offering.

The company plans to sell 1.6 million shares at C$5.50 each.

The deal is being placed through a syndicate of underwriters led by Paradigm Capital Inc.

One market source who saw the offering said he felt it was priced in line, but noted that the earnings per share for this company dipped compared to the first quarter of 2004.

The company's earnings report, released last month, said its earnings per share were $0.03 for the first quarter of 2005, compared to $0.07 for the same period in 2004.

On Thursday, after the deal was announced in the morning, Glentel's stock gained $0.17, or 3.09%, to close at $5.67.

Based in Burnaby, B.C., Glentel provides voice and data wireless radio equipment and maintenance. The proceeds will be used to fund a portion of the company's acquisition of Cabtel Corp.

Diadem prices C$2 million deal

PIPE repeat issuer Diadem Resources Ltd. announced its plans to raise C$2 million in a private placement late Thursday.

The offering, which will be placed on a non-brokered basis, includes up to 40 million flow-through shares at C$0.05 each.

"The fact that they're flow-through shares is good for them because of the tax break they can get," said one Canadian sell-sider who had seen the deal.

"I'd say for [flow-through] shares, the price is a little low. I think they could have probably gotten more. This is about what you'd price their [non flow-through] shares. But given that it's not brokered, that could be a factor and given that there is a tax break involved, they may not care."

Diadem's spokeswoman Lina Noble did not return requests for additional comments on the offering by press time Thursday.

Toronto-based Diadem is a diamond exploration and development company.

Diadem's stock closed unchanged at C$0.055 on Thursday.

MagIndustries' stock drops

MagIndustries Corp.'s stock slid Thursday after the company closed a $12.1 million private placement earlier this week.

The company's stock closed down $0.06, or 7.89%, to close at $0.70 Thursday.

After the deal closed Tuesday, the company's stock stood still at $0.76 for two days.

The company's stock closed at $0.76 Wednesday after closing unchanged on Tuesday as well.

The company sold units at $0.75 each after revamping the deal a few times.

MagIndustries also closed a $2.9 million non-brokered deal on Tuesday.

Based in Halifax, N.S., MagIndustries provides magnesium alloys for the automotive industry.

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