PIPE volume holds steady as stocks rebound; Global Alumina raises $100 million

By Sheri Kasprzak

New York, Aug. 17 - Even though private placement volume did not pick up substantially Wednesday, rising stocks did help push a few more offerings, sell-siders said.

"I think it was a very subtle change," said one market source. "Stocks were weird the past few days, so issuers are still a little hesitant, I'd say. But on the whole, it was a pretty good day."

Another source noted that some larger offerings have been closing lately and this may be a good sign.

In terms of amounts raise, this source said the market has been inundated lately with a greater number of large offerings like Wednesday's $100 million Global Alumina deal. That same company announced the impending settlement of a $200 million offering earlier this month.

"That, to me, is a signal that at least a few companies are comfortable enough with the market that they're digging in with this really huge [offerings]," he said. "We tend to be a market of catch-as-catch-can deals. You rarely see anything particularly enormous, but over the past few weeks, there've been more than a few."

In the latest Global Alumina deal, the company sold 25 million shares at $2.00 each and a $50 million convertible debenture to Emirates International Investment Co. LLC.

The debenture bears interest at 10% annually, matures in five years and is convertible into common shares at $2.50 each.

SW Source Capital was the placement agent.

The Toronto-based bauxite exploration company announced that it secured $200 million from Dubai Aluminium Co. Ltd. on Aug. 11.

In that offering, Dubai agreed to buy 10 million shares at $2.00 each for now and will purchase the remaining $180 million in stock once Global Alumina raises $700 million in equity financings. In fact, the $100 million Emirates International deal is part of that financing effort.

Global Alumina will put the proceeds from the Dubai deal to work to construct and develop an aluminum refinery in Boke, Guinea. That project is slated for completion in 2009.

"This $100 million subscription agreement arranged by Dubai-based private equity house SW Source Capital is another significant step forward toward completion of the equity financing required to facilitate the development and construction of Global Alumina's 2.8 million tonne per annum alumina refinery," said the company's chief executive officer, Bruce Wrobel, in a statement.

"The proceeds from this transaction will considerably enhance our ability to maintain our current construction schedule and lift Global Alumina's aggregate subscribed equity to $438 million toward our object of $700 million."

The company's stock remained unchanged Wednesday at $1.57.

For the quarter ended June 30, the company reported a net loss of $3,369,821, compared to a net loss of $5,541,977 for the corresponding quarter in 2004.

Chartered Semiconductor raises $300 million

Moving to the tech sector, Chartered Semiconductor Manufacturing has completed a private placement of units for $300 million.

The units include convertible preferred stock and amortizing bonds due Aug. 7, 2010.

The preferreds are convertible into American Depositary Shares at $0.8719 each, a premium to the company's closing stock price of $0.7185 on Tuesday.

So far, the company has issued $47 million in the bonds.

Goldman Sachs Singapore Pte. was the placement agent.

The proceeds will be used to repay some debt, and the remainder will be used for working capital and general corporate purposes.

Singapore-based Chartered Semiconductor creates system-on-chip designs for semiconductors.

On Wednesday, Chartered's stock lost $0.14 to end at $7.12.

Gander Mountain wraps $20 million deal

Outdoor equipment retailer Gander Mountain Co. zipped up a $20 million convertible note offering Wednesday.

The company sold the notes to a private investor.

The 7% notes mature on Aug. 16, 2010 and are convertible into common shares initially at $16.00 each.

"This financing will help drive our aggressive growth as we seek to take advantage of consolidation in the fragmented outdoor lifestyle market," said Mark Baker, the company's president and chief executive officer, in a statement. "By adding new stores, we can expand our geographic diversity and realize increased benefits of scale."

The St. Paul, Minn., company's stock lost $1.11 to close at $10.15 Wednesday.

Verticalnet closes $6.6 million notes

Malvern, Pa.-based Verticalnet, Inc. completed a convertible note offering for $6.6 million, the company reported.

The notes mature in 23 months, bear interest at 9% annually and are convertible into common shares at $0.70 each.

The investors also received warrants for 4,719,000 shares, exercisable at $0.77 each.

C.E. Unterberg, Towbin was the placement agent.

"Today's financing has the effect of strengthening our balance sheet while bringing a number of highly reputable investors to Verticalnet in a long-term investment structure," said Nathanael Lentz, the company's chief executive officer, in a statement. "The transaction structure provides us with repayment flexibility that allows us to repay in cash or in stock, at our option, and is a good balance between equity and debt. We believe that this funding will provide our balance sheet with the strength needed to drive our business forward."

Verticalnet is a supply management company. The proceeds will be used for working capital and general corporate purposes.

Verticalnet's stock lost $0.05 to end at $0.62.

Nektar's stock slips

Nektar Therapeutics Inc.'s stock fell on Wednesday after closing a $24 million direct stock offering on Tuesday.

The company's stock dropped $0.23, or 1.32%, to close at $17.25.

On Tuesday, when the offering was announced, the company's stock sank $0.14, or 0.8%, to end at $17.48.

San Carlos, Calif.-based Nektar is gearing up to close the direct sale of stock at $16.71 per share to a single institutional investor to fund its acquisition of competitor Aerogen Inc.

Both Aerogen and Nektar are in the business of developing drug-delivery technologies used by biotech and pharmaceutical companies.

The shares are being sold under the company's shelf registration, and the offering should be funded in full by Aug. 19.

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