New Millennium closes Tata deal; Castle offers preferreds, replaces debt; Wren sells stock, convertibles

By Kenneth Lim

Boston, Oct. 9 - New Millennium Capital Corp. closed a C$23.53 strategic placement to Tata Steel Global Mineral Holdings Pte. Ltd.

Castle Brands Inc. plans to raise between $12.5 million and $15.13 million through a private placement of convertible preferreds.

Wren Homes Group plc announced a £4 million placement of stock and convertibles to Wainford Holdings Ltd.

New Millennium closes Tata deal

New Millennium placed C$23.53 million of its common stock to steel giant Tata Steel.

The company sold about 26.14 million shares at C$0.90 each. New Millennium common stock (TSX: NML) closed at C$0.40 on Thursday, down by C$0.04 or 9.09%.

The proceeds will be used to develop New Millennium's direct shipping ore project in Newfoundland and Labrador and in Quebec.

New Millennium is a Calgary, Alta.-based mineral exploration company.

The deal gives Tata, a subsidiary of Jamshedpur, India-based Tata Steel Ltd., a 19.9% stake in New Millennium. Beyond being a partner on New Millennium's projects, Tata will also be entitled to two nominees on New Millennium's board of directors.

"The agreement with Tata Steel, the world's sixth largest steel producer, is a decisive corporate event for New Millennium," New Millennium president and chief executive Robert Martin said in a statement.

"It is also a definitive recognition that the company offers significant sources of supply, of high quality iron ore products, for the global steel industry from a country rated highly for mining investment. This agreement culminates a lengthy and thorough search for a strong strategic investor. Tata Steel is an ideal partner for New Millennium and offers our shareholders the most efficient way to realize value, in the near term, from the company's DSO [direct shipping ore] project and in the longer term from its LabMag Project."

Tata Steel Ltd. managing director B. Muthuraman added: "Tata Steel Group is pleased to have signed this binding agreement with New Millennium, which gives Tata Steel Group the opportunity to work closely with New Millennium on the DSO and LabMag properties to develop these as a world-class project. Subject to the establishment of their economic viability, these projects may prove to be a source for part of the raw materials requirements of Tata Steel Group. In view of geographical proximity, Canada is a favorable location to source raw materials for Tata Steel Group's European operations."

Castle to sell convertibles

Castle Brands plans to offer $12.5 million to $15.13 million of series A convertible preferred stock through a private placement.

The deal will involve between 1 million and 1.21 million preferreds at $12.50 apiece. Each preferred will initially be convertible into 35.7143 common shares, implying an initial conversion price of about $0.35. Castle Brands common stock (AMEX: ROX) slipped 3.65% or just under a penny on Thursday to close at $0.19.

The placement is part of negotiations with investors led by current shareholder Phillip Frost. If the deal goes through, it will likely change the company's debt structure. With a deal in place, the company expects all holders of Castle Brands subsidiary Castle Brands (USA) Corp.'s $10 million outstanding of 9% senior secured notes to convert their notes into the preferred at $12.50 per preferred share. Holders of the company's $9 million of convertible notes are expected to convert into the preferred shares at $23.21 apiece.

New York-based Castle Brands, a seller of various brands of alcohol, said the placement and the subsequent debt conversion will help provide stability to its "strained" cash position.

"The proposed transaction should place the company on a much firmer footing and allow the company to pursue its original vision of building its own premium brands and representing other specialty brands which should accrue to the long-term benefit of our stockholders and better position us to achieve our goals," Castle Brands chairman Mark Andrews said in a statement.

Wren Homes raises £4 million

Wren Homes said it plans to place £1 million of its common stock and £3 million of five-year unsecured convertibles to Wainford Holdings.

The stock offering comprises 1 million ordinary shares at 10p per share. Wren common stock (LSE: WHG) closed at 10p on Thursday, up by 8.11% or 0.75p.

The loan will bear interest at 5% and is convertible into ordinary shares at 5p per share.

Wren Homes, a Surrey, England-based housing developer, said proceeds will be used to fund development of the company's Extra Care accommodation schemes and for general working capital purposes.

"I am delighted to announce this very significant investment into Wren Homes and at a premium to the current share price," Wren chief executive Paul Treadaway said in a statement.

"It represents a strong endorsement of the company and its ambition to roll out its Extra Care retirement living model, in which self contained apartments are provided for the active elderly within a supportive environment, as well as a range of medical, nursing and domestic support services and communal facilities also being available to residents.

"In spite of the current uncertain market, this investment should allow us to continue to develop our second Extra Care scheme at Crowborough, which has recently received planning consent, and move the company further towards fulfilling our vision of leading the introduction of a new and innovative model in the retirement living sector," he added.

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