SafeStitch expands shareholder base; West China takes loan; Kennedy-Wilson, My Screen close deals

By Kenneth Lim

Boston, May 30 - SafeStitch Medical, Inc. said the majority of its recent $4 million private placement of stock went to non-insiders, giving the company important capital as well as a broader shareholder base.

West China Cement Ltd. said it negotiated a $60 million loan facility that will help it fund its medium-term goals.

Kennedy-Wilson, Inc. said it upsized a placement of convertible preferred stock to $50 million, while My Screen Mobile, Inc. closed a $10 million stock offering to strategic investor Orascom Telecom Holdings, SAE.

SafeStitch closes placement

SafeStitch Medical said it closed a $4 million private placement of stock between May 22 and May 28.

The company sold 1,861,505 common shares at $2.15 per share. SafeStitch common stock (OTCBB: SFES) closed at $2.95 on Friday, higher by 22.92% or $0.55.

SafeStitch, a Valley Stream, N.Y.-based medical device company, said the proceeds will be used for general working capital, including research and development.

"We are excited that these investors have shown their confidence in our research and management teams and our product candidates by investing in SafeStitch," company president and chief executive Jeffrey G. Spragens said in a statement.

SafeStitch chief operating officer Stewart B. Davis also commented: "This infusion of capital will help us to continue the expansion of our in-house R&D capabilities. Our current product development is progressing on track, and our gastroplasty device could be in human clinical trials as early as the end of this year."

Davis said the capital was important for the company to further develop its current projects.

"It's really to continue our development program on our current products and also to develop our pipeline a little further," he told Prospect News. "It's also to start on the first clinical trials on our gastroplasty device."

But Davis said the capital raise also played an important role in diversifying the company's shareholder base.

"From the company's standpoint, we can have a broader shareholder base now with a new group of shareholders who previously were not affiliated with the company," he said. "We think the capital and the new shareholders will help because we want to get our shares listed on the American Stock Exchange."

The investors who took part in the placement included SafeStitch chairperson Jane Hsiao, Spragens and some of his relatives, directors Kevin Heithoff and Kevin Wayne, and Frost Gamma Investments Trust, which is controlled by SafeStitch's largest shareholder, Phillip Frost.

But Davis said the placement mostly went out to new investors.

"A good majority of our shares right now are tightly held by our founders and directors of the company," Davis said. "But in this placement the bulk of the shares went to unaffiliated people."

SafeStitch does not have any immediate plans to raise more capital.

"I don't think we have any near-future plans to raise any more money," Davis said. "Of course, we don't know for sure what will happen, so our plans could change, but we do have access to a line of credit as well."

The company was satisfied with the pricing of the deal, he said.

"It's a relatively small discount," Davis said. "Obviously it would be hard to sell above where it was trading, but we're glad the discount was so small."

West China takes loan

West China Cement said it arranged a $60 million loan facility that bears interest of 13.5%.

The company will repay 50% of the outstanding loan advanced under the facility within two years and the remaining 50% will be repaid in three years.

Investors also will receive warrants for 7,802,142 ordinary shares, with a strike price equal to a 15% premium to the average equivalent closing price per share over the 20 trading days immediately preceding the date of the warrant issue. The warrants are exercisable for three years.

West China common stock (AIM: WCC) closed at 145p on Friday, higher by 5.45% or 7.5p.

West China, a Jersey, United Kingdom-based cement producer and distributor, said proceeds will be used to fund the completion of the company's ongoing construction of a new cement plant in Ankang, China.

"I am delighted that, despite the credit crunch, we have now put in place the financing necessary to complete the exciting Ankang project," West China chairman Robbie Robertson said in a statement. "This is another significant step towards meeting our medium term objective of an 8 to 10 million [metric] ton producer, as it gets us to 5.3 million tons."

West China chief executive Jimin Zhang added: "The Ankang cement plant is situated in an area of Shaanxi where cement pricing is at a premium to the rest of the province and we anticipate that it will derive very favorable returns for the company and its shareholders. Based on the company's feasibility study, the Ankang project is expected to add approximately RMB528 million and RMB215 million to the company's revenue and net profit respectively. With our production lines at Pucheng, and the 2 million ton production facility we completed last year at Lantian, this plant firmly establishes WCC as one of the major Shaanxi cement producers."

Kennedy-Wilson upsizes deal

Kennedy-Wilson said it upsized its placement of convertible preferred stock to $50 million from an originally planned $40 million.

The 7% preferreds must convert to common stock at $42 per share within three years. Kennedy-Wilson common stock (Pink Sheets: KWIC) closed unchanged at $46 on Friday.

Kennedy Wilson's chief executive officer William J. McMorrow invested $5 million. The company's management team and existing shareholders purchased half of the offering, and a small group of investors purchased the balance.

The preferred funding, along with company funds will be used to fund the co-investment piece of the company's growing real estate investment partnerships.

Kennedy Wilson is a real estate services and investment firm headquartered in Beverly Hills, Calif.

"We are extremely pleased to complete the offering in such a short period of time, and for the support of our management group, existing shareholders, and new investors," McMorrow said in a press release. "The funds raised will significantly increase Kennedy Wilson's ability to take advantage of the current opportunities in all sectors of the real estate investment, distressed debt, and service business. Through our various funds and strategic alliances, we intend to acquire $3 billion of assets over the next three years. In addition, our service platform, led by our real estate auction business, is on track for a record year."

My Screen raises $10 million

My Screen Mobile, Inc. said it closed a $10 million private stock placement to Orascom Telecom.

The deal involved 12.5 million common shares at $0.80 per share. My Screen common stock (Pink Sheets: MYSL) gained 0.51% or a penny to close at $1.98 on Friday.

Orascom also received warrants for 20 million shares, exercisable at $2.00 until May 23, 2012.

The company agreed to set aside $3 million of the proceeds to invest in technology, software and programming. My Screen plans to use the remainder of the proceeds for general corporate purposes and for working capital.

Based in Toronto, My Screen Mobile offers ads on mobile telephones.

The deal gives Orascom exclusive access to My Screen's technology in Orascom's operational areas, including Pakistan, Italy, Greece, Algeria and Egypt. Orascom will also be able to designate a chief financial officer and up to two directors to My Screen's management and board, giving Orascom control over a third of My Screen's board.

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