GE raises $3 billion from Berkshire Hathaway; SyntheMed sells units; SilverBirch offers notes, eyes more

By Kenneth Lim

Boston, Oct. 1 - General Electric Co. lit up the PIPEs market on Wednesday with news that Warren Buffett was investing $3 billion in the company.

SyntheMed, Inc. raised $4 million through a placement of stock and warrant units that the company said will allow it to develop new products.

SilverBirch Inc. said it is selling $2 million of senior secured term notes and could raise a further C$500,000 as it completes a planned acquisition.

GE lands $3 billion investment

General Electric said it will issue $3 billion of 10% perpetual preferred stock to Berkshire Hathaway, Inc.

The preferreds may be called after three years at a 10% premium.

Berkshire Hathaway, the investment company run by billionaire Warren Buffett, will also receive warrants for $3 billion in common stock, exercisable at $22.25 for five years. General Electric common stock (NYSE: GE) closed at $24.50 on Wednesday, slipping 3.92% or a dollar.

General Electric is a diversified technology, media and financial services company based in Fairfield, Conn.

General Electric is also offering at least $12 billion of its common stock to the public, with an over-allotment option for an additional 15%, or about $1.8 billion.

Proceeds of the financing will be used for general corporate purposes.

"GE is the symbol of American business to the world," Buffett said in a statement. "I have been a friend and admirer of GE and its leaders for decades. They have strong global brands and businesses with which I am quite familiar. I am confident that GE will continue to be successful in the years to come."

"This action does two things for GE investors," General Electric chief executive Jeff Immelt also stated. "First, it enhances our flexibility and allows us to execute on our liquidity plan even faster. Second, it gives us the opportunity to play offense in this market should conditions allow. In addition, we remain committed to the Triple A rating and in the recent market volatility, we continue to successfully meet our commercial paper needs.

"The economic environment remains volatile," Immelt added. "However, the company's performance remains on track with the earnings guidance we provided last week for 2008, including third quarter financial services earnings of approximately $2 billion and industrial earnings growth of between 10% and 15%, excluding our consumer & industrial business."

SyntheMed raises $4 million

SyntheMed said it placed $4 million of stock and warrant units at a premium to market with a consortium of European investors.

The company may raise an additional $2 million on the same terms.

The placement involved 10 million units of one common share and one warrant at $0.40 per unit. Each warrant expires in three years and is exercisable at $0.50. SyntheMed common stock (OTCBB: SYMD) rose 9.52% or $0.02 to close at $0.23 on Wednesday.

Iselin, N.J.-based SyntheMed is a biomaterials company engaged in the development and commercialization of anti-adhesion and drug delivery products based on its proprietary technology.

"We are very pleased with the positive response of the investors who participated in this placement," SyntheMed president and chief executive Robert Hickey said in a statement. "The proceeds will allow us to advance the development of a portfolio of new anti-adhesion products and to prepare for the launch of REPEL-CV Adhesion Barrier in the United States."

SilverBirch issues notes

SilverBirch said it is placing $2 million of eight-month senior secured term notes as it completes a planned acquisition of Red Mile Entertainment Inc.

The notes will bear interest at 1% per month during the first six months and 1.5% per month thereafter until maturity. The term of the notes may be extended for an additional four months.

The company has already received $1.3 million and will take the remaining $700,000 upon the successful completion of the Red Mile acquisition.

Investors will also receive 3 million warrants exercisable at C$0.10 per share.

SilverBirch common stock (TSX: SVB) closed at C$0.10 on Wednesday, unchanged from the day before.

The net proceeds will be held in escrow pending the completion of a planned C$500,000 non-brokered private placement financing, the company said.

Toronto-based SilverBirch develops and distributes interactive media content.

"This funding will allow us to properly launch our CrossFire game in the next 45 days which we expect to drive substantial revenues and strong cashflow for our 2009 fiscal year," SilverBirch chief executive Derek van der Plaat said in a statement.

SilverBirch on Wednesday also said in a press release that it was "comfortable" with analyst forecasts of about C$19 million in revenue for the fiscal year 2009.

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