Greystar cancels C$50 million deal; Formation plans C$6.25 million unit sale; Savient to sell units

By Stephanie N. Rotondo

Portland, Ore., April 3 - Greystar Resources Ltd. canceled a private placement of stock, according to a press release issued Friday.

The deal had been announced earlier in the week and was slated to bring the company C$50.13 million of additional financing. Market conditions were cited as reason for the cancellation.

Meanwhile, Formation Capital Corp. said it was planning to raise C$6.25 million through a non-brokered private placement.

Savient Pharmaceuticals Inc. aims to raise $31 million via a direct registered offering of units.

Con-Space Communications Ltd. entered into an agreement to issue 22 million shares to Turret Oy Ab for C$1.1 million. The transaction will increase Turret's equity interest in the company to 71.6%.

Greystar cancels offering

Greystar Resources announced that it had canceled a private stock placement originally announced on March 30 due to market conditions.

Under the terms of the deal, Greystar planned to sell up to 12.5 million common shares at C$4.01 per share for a total of C$50.13 million. The deal was expected to close on April 20.

As previously reported, the financing was not "crucial" to the company's bottom line, as Andreas Curkovic, Greystar's investor relations representative, reiterated in an interview with Prospect News on Friday.

When the deal was originally announced, Curkovic told Prospect News that the deal had been brought to the Vancouver, B.C.-based company by a syndicate of investment banks, led by Ocean Equities Ltd.

"We didn't need the money from a working capital perspective," Curkovic said on March 30. "But we felt it was prudent for the company at this late stage of development to entertain taking the money when it was made available."

"They found that circumstances had changed," Curkovic said on Friday, speaking of the banks' belief that the deal was not favorable in the current market. "I'm not really sure how they gauged that."

And while this is not the first deal to ever be canceled, nor was it essential from an operating perspective, Curkovic said that the cancellation was "not pleasant."

"If you agree to a deal and it's pulled a few days later, that's not pleasant," he said.

"Would it have been better if this deal had never been brought to them?" he continued. "Well, yes, considering that it didn't go through. But these things happen."

However, Curkovic said that the deal could be something that the company readdressed in the future.

Greystar's equity (Toronto: GSL) declined 3 cents, or 0.79%, to C$3.79.

Formation plans unit sale

Formation Capital plans to raise up to C$6.25 million through a non-brokered private placement of units, the company announced.

Each unit will contain one common share and one half-share warrant. The units will sell at C$.025 per unit and up tot 25 million will be issued. A whole warrant is exercisable at C$0.40 for two years.

Rick Honsinger, P.Geo., Formation's vice president of corporate communications, said in an interview with Prospect News that the company itself had structured the deal and that it has received "very strong interest because our share price is doing well."

"We just hope the share price will maintain," he said.

Also, a strategic investor has already committed to proving $3 million of the funds, more than half the total amount of the offering. Honsinger said there were no fees or warrants associated with that investor's participation, "so that's good news for shareholders."

As for the choice to go the private placement route versus another avenue of financings, Honsinger said that it was preferred, especially since the deal is non-brokered.

"For a shorter term, for a smaller financing, it's a simpler way of [raising money] without incurring any debt," he added.

Proceeds from the financing will be used for general administrative purposes supporting the company's Idaho Cobalt Project, Honsinger said.

The deal is expected to close April 24.

Formation's stock (Toronto: FCO) held steady at C$0.30.

Formation Capital is a Vancouver, B.C.-based mining company.

Savient to raise $31 million

East Brunswick, N.J.-based Savient Pharmaceuticals will issue 5.93 million units in its effort to raise $31 million through a direct registered offering.

Each unit will contain one common share and one warrant. The units will sell for $5.23 per unit, according to a press release. The warrants are exercisable at $10.46 per share and equal 0.85 shares of common stock.

Should the Food and Drug Administration issue a compete response letter regarding the company's application for Krystexxa, then the warrant exercise price will be amended to reflect the weighted average price of Savient's stock as of the fifth trading day immediately preceding the 10th trading day following the announcement. However, the exercise price may not exceed $10.46 or fall under $1.57.

Krystexxa is a drug that treats gout.

The company expects to close the deal by April 8.

Savient's stock (Nasdaq: SVNT) slipped 31 cents, or 5.88%, to $4.96. Market capitalization is $262.98 million.

Con-Space to sell shares

Communication company Con-Space said it arranged a C$1.1 million private placement of shares with Turret Oy Ab.

Turret, the company's largest shareholder and secured lender, will purchase 22 million common shares at C$0.05 per share. After completion of the transaction, Turret will hold 33,528,609, or 71.6% of the company's outstanding shares.

Con-Space is currently in default on its secured loan agreement with Turret, for a total of C$4.9 million. Turret made a second interim $50,000 loan under its agreement, pending completion of the placement.

"This transaction is a necessary step toward resolving the burden of a debt load and capital structure that has been negatively affecting the company for the past year," said Gordon Cook, president and chief executive officer of Con-Space, in a statement.

"Operationally, we have made and continue to make progress toward completing our turnaround plan, even in the current economic downturn. This transaction is expected to put the company on firmer financial ground and assist us in our endeavours to meet our stakeholders' needs and allow for our operations to continue uninterrupted. We are fortunate that Turret has responded favourably to our request for additional financing during these difficult financial times," Cook said.

Proceeds from the transaction will be used to pay SSI vendors, as well as to repay Turret for the two $50,000 bridge loans and for the overdue interest. The balance will be used for general working capital and for costs associated with restructuring.

Con-Space's equity (TSX Venture: CCB) fell C$0.005, or 20%, to C$0.02.

Con-Space is based in Richmond, B.C.

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