Duvernay plans C$40.82 million private placement; Global Sources raises $40.5 million

By Sheri Kasprzak

Atlanta, March 18 - Private placement volume trailed off as the week ended, source says, after issuance boomed Thursday on higher oil prices and stronger natural resources stocks.

"There was certainly plenty out there today, but not nearly as much as yesterday," said one sell-sider. "I think it's a combination of things. Stocks were down for most of the day and it's the end of the week as well. It's perfectly normal for things to slow down, at least a bit, come Friday."

Oil, mineral and metals companies still dominated issuance as the week ended.

"With oil prices where they are and mineral and precious and base metal stocks doing very well, there's definitely incentive for issuers to get deals out there," said one market source from Canada. "I think next week will likely be more of the same."

Oil prices continued to climb Friday, closing up $0.32 to end at $56.72.

Stocks, meanwhile, closed mixed. The Dow Jones Industrial Average was up 3.32 to close at 10,629.67; the Nasdaq composite index closed down 8.63 at 2,007.79 and the S&P 500 edged down 0.56 at 1,189.65.

Heading up activity was a C$40,825,000 offering from Duvernay Oil Corp.

The company announced its plans to sell 1.15 million flow-through shares at C$35.50 each.

The company announced the deal Friday morning as a C$35.5 million offering of 1 million flow-through shares, but later upsized the deal.

"Clearly, its stock responded to this deal and they're taking advantage of a good time to raise as much capital as they can," said one source familiar with the deal.

"The terms look very good. It's at a premium. The rise in oil prices absolutely affected the pricing of the deal and absolutely affected their decision to upsize."

After announcing the deal Friday morning, Duvernay's stock gained C$1.35 to close at C$30.85.

The deal is being placed through a syndicate of underwriters led by Peters & Co. Ltd.

Based in Calgary, Alta., Duvernay is an oil and natural gas exploration and development company. The proceeds will be used for exploration.

Global Sources closes $40.5 million deal

Moving away from resources and private placements, Global Sources Ltd. said it closed a direct placement for $40.5 million.

The company issued 3 million shares at $13.50 each to institutional investors.

The pricing is a 19.5% discount to the company's closing price of $16.78 each on March 17.

"That's a pretty significant discount and it doesn't look like the market has responded well," said one market source who had seen the deal. "I can't really pinpoint anything about this company that would cause a need for such a huge discount and that's probably why its stock was down 20% today."

After the deal was announced Friday morning, Global Sources' stock dove $3.37 to close at $13.41 and gained $0.08 in after-hours trading.

The shares were sold under the company's shelf registration.

WR Hambrecht & Co., LLC is the placement agent.

Based in New York, Global Sources is a business-to-business media company, focused on trade magazines.

RNC upsizes deal to C$9 million

For the second time this week, RNC Gold Inc. has upsized its previously announced C$5.5 million private placement, this time to C$9 million.

The company will now sell up to 9 million units at C$1 each.

The units include one share and one half-share warrant. The whole warrants provide for an additional share at C$1.25 each for five years.

Since the company first announced the deal Feb. 24, one market source noted, RNC's stock has steadily retreated.

"It's actually a little odd," the source said. "You'd figure if they needed more capital, they would put off upsizing or even conduct a separate deal once their stock made some gains. Can't really explain that. The one thing I can say that warrants look pretty good for them."

The deal was first announced Feb. 24 without details as a C$5.5 million offering, was increased to C$6 million Feb. 25 and was upsized again March 15 to C$7 million.

Canaccord Capital Corp. is the placement agent.

Based in Toronto, RNC is a gold mining company. It plans to use the proceeds from the deal to develop its Cerro Quema gold project and explore the Bonanza and LaLibertad gold mine properties. The remainder will be used for working capital and general corporate purposes.

On Friday, RNC's stock closed unchanged at C$1.01.

Avenue plans C$1 million deal

Avenue Financial Corp. said it is heading to the private placement market with an offering for up to C$1 million.

The deal includes up to 20 million units at C$0.05 each.

The units consist of one share and one warrant. The warrants allow for an additional share at C$0.10 each for two years.

According to a statement from the company, through its affiliate Avenue Global Asset Management Inc., will be offering three series of shares on a rolling-close basis through investment advisors, counselors and planners.

"Growth of alternative asset investments in Canada is at an annual rate of over 45%," said Robin Ross, the company's chairman and chief executive officer, in a statement. "The Canadian market is significantly behind that of the United States in relative size. Avenue intends to participate in and ultimately benefit from this growth. The AGAM platform allow for the introduction of new products with little cost and on a timely basis. Over the next 18 months, we plan on introducing new products and new distribution partners for both the retail and institutional markets. This current money raise will be used primarily for product marketing and distribution."

Based in Toronto, Avenue Financial is an administrator of segregated and pooled managed fund products and services. It plans to use the proceeds from the deal for product marketing and distribution.

On Friday, Avenue's stock closed unchanged at C$0.045.

Canex's stock makes gains

A day after announcing its plans to raise C$10,125,000, Canex Energy Inc.'s stocks made some gains.

"Higher oil prices helped with the pricing, which, ultimately, helped push their stock up today," said one market source who had seen the deal.

The company plans to sell shares at C$2.70 each.

On Thursday, when the offering was first announced, Canex's stock didn't budge and closed at C$2.90.

Based in Calgary, Alta., Canex is an oil and natural gas exploration, development and production company. It plans to use the proceeds from the deal for continued exploration and development.

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