Broadpoint gets $20 million, investor; Westmoreland raises $15 million; Best Energy, Exterra sell stock

By Kenneth Lim

Boston, March 5 - Broadpoint Securities Group Inc. said it raised $20 million in a stock sale that mostly landed in the hands of new investor and client MAST Capital Management LLC.

Meanwhile, cash-strapped Westmoreland Coal Co. received $15 million from its largest shareholder in a sale of convertible notes.

Best Energy Services Inc. raised $8.64 million from a private placement of stock-and-convertible units.

Exterra Energy Inc. said the $1.1 million it raised in a private share offering will enable it to enter production on some of its advanced-stage oil wells.

Broadpoint receives $20 million

Broadpoint Securities said it sold $20 million worth of its common stock in a private placement to its employees and a new shareholder.

The deal comprised about 11.6 million shares at $1.70 per share. Broadpoint stock (Nasdaq: BPSG) closed at $1.70 on Wednesday, up by 17 cents, or 11.12%.

MAST Capital, a Boston-based investment manager that focuses on special situations debt and equity investment opportunities, took 7.1 million of the shares. Also receiving stock in the placement were 23 Broadpoint employees, including chairman and chief executive Lee Fensterstock, and Broadpoint's controlling shareholder, Matlin Patterson.

New York-based Broadpoint, formerly known as First Albany Cos. Inc., is an investment bank and institutional securities firm.

Broadpoint has been going through a number of changes over the past year.

"Since the launch of Broadpoint at the end of September and the $50 million investment by Matlin Patterson, we have made tangible progress toward our goal of building a premier investment bank serving mid-size companies and their investors," Fensterstock said in a press release. "The company has been stabilized, our capital allocation to Broadpoint Descap has resulted in immediate profit improvement and our hiring from BNY Capital Markets of the employees forming our new debt capital markets group gives us significant product capability to more fully serve our institutional and corporate clients. I am gratified at the vote of confidence MAST Capital Management LLC, Matlin Patterson, and our employees have given us in our most recent capital raise."

MAST, which is owning Broadpoint stock for the first time, is also a client of the debt capital markets group that Broadpoint acquired from the Bank of New York, Fensterstock told Prospect News.

"They also have a relationship with Matlin Patterson, who as you know is our majority shareholder," he said. "They had approached me to see if there was an investment opportunity and they had approached me just at the point when we had planned to raise some money."

Fensterstock said Broadpoint will use the proceeds of the deal to finance the inventory positions for its debt capital markets group and for working capital.

The choice of an equity financing and the pricing at a premium to market value was simply a reflection of what the buyers wanted, Fensterstock said.

"It was really a measure of how the market wanted to invest," he said. "There's an old saying that if somebody offers to invest at a fair price, it's probably a good idea to take it because it's sometimes hard to time those things. MAST was a good partner who understands our business and has confidence in our company. It was really what they offered. It's no more complicated than that."

Westmoreland sells $15 million of notes

Westmoreland said it sold $15 million of 9% convertible senior secured notes due March 4, 2013 to shareholders Tontine Partners LP and Tontine Capital Partners LP.

The notes are convertible into Westmoreland common stock at $10.00 per share, representing an initial 34% discount to Westmoreland's Tuesday closing stock price of $15.13. Westmoreland shares (AMEX: WLB) closed at $16.22 on Wednesday, up by 7.2%, or $1.09.

As part of the deal, a May 2, 2007 standby purchase agreement between Westmoreland and Tontine was canceled. That agreement was intended as a backstop for a proposed rights offering of common stock by Westmoreland.

Westmoreland is a coal company based in Colorado Springs.

Westmoreland, which is expected to restate its financial statements from 2004 to June 30, 2007, said previously that it had sufficient capital to last only through the fourth quarter of 2007.

"We have worked hard over the last several months to manage our business to conserve cash, but the requirements of our business required that we seek additional capital," Westmoreland president and chief executive Keith E. Alessi said in a statement. "We are pleased that Tontine, Westmoreland's largest shareholder, has assisted the company in addressing its liquidity needs by purchasing these notes at a time when the company is still working on its restatement of previously issued financial statements for the years ended December 31, 2004, 2005 and 2006 as well as the quarters ended March 31 and June 30, 2007."

Best Energy raises $8.64 million

Best Energy said it raised $8.64 million from a private placement of units to 64 institutional and accredited investors.

Each $1,000 unit comprised 90 shares of Best Energy's 7% series A convertible preferred stock and 625 common shares.

Each preferred has a face value of $10.00 per share and may be convertible into the common stock at $4.00 per common share.

Best Energy (OTCBB: BEYS) common stock did not trade on Wednesday.

Best Energy is required to use at least 25% of its net after-tax income each year to redeem the preferreds.

Andrew Garrett, Inc. acted as placement agent.

Houston-based Best Energy is an oil field services company formerly known as Hybrook Resources Inc.

"Given the proceeds from our recent equity offering and the additional funds available to us through our $25 million revolving credit facility, we enjoy the tactical advantage of being able to move quickly and decisively on those business opportunities that are well aligned with our long term growth strategy," Best Energy chief executive Larry Hargrave said in a press release.

Exterra eyes production

Exterra Energy said it will be able to enter into production on some of its advanced-stage oil wells following its $1.1 million private placement of stock.

Exterra, a Houston-based emerging oil and gas exploration and production company, said it sold the shares at $0.75 each. Exterra stock (OTCBB: EENR) gained $0.02, or 1.48%, to close at $1.37 on Wednesday.

"This initial private placement is the first step in a comprehensive financing strategy that will enable the company to put wells that are already drilled into production and to finalize the drilling program during this phase," chief executive Ray Ledesma said in a statement. "This comprehensive strategy will include the reworking of existing wells, the frac stimulation of newly drilled wellbores, the development of undrilled acreage and the acquisition of additional working interest through our partners that will ultimately increase revenues and expand reserves."

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