Sterling adds Warburg as investor; Hamton Roads plans capital raise; R.G.I. seeks $90 million

By Stephanie N. Rotondo

Portland, Ore., May 24 - Several larger deals were in the PIPE market Monday, including two from financial institutions.

Sterling Financial Corp. said it had added Warburg Pincus Private Equity X, LP as an investor, inking a deal with them for a $139 million private placement of common and preferred stock. In connection with the transaction, Thomas H. Lee Partners, LP - a previously announced investor - agreed to invest $139 million as well.

And Hampton Roads Bankshares Inc. announced a $275 million financing plan that included a $255 million private placement of equity, as well as a $20 million rights offering. The Carlyle Group and Anchorage Advisors LLC are among the investor group participating in the private placement.

Away from financials, R.G.I. International Ltd. said it wanted to raise up to $90 million from a private placement of ordinary shares. Synergy Classic Ltd. is the sole investor.

Cell Therapeutics Inc. brought a $21 million registered direct offering of stock and warrants to market. The company said three unnamed investors have agreed to participate in the financing.

Also, Global Earth Energy Inc. secured a $10 million three-year credit line with a hedge fund. The financing will be used to advance the company's solar energy unit.

Sterling adds Warburg as investor

Sterling Financial, a Spokane, Wash.-based bank holding company, secured Warburg Pincus Private Equity X, LP as an investor for a $139 million private placement of common and preferred shares.

In connection with the financing, Thomas H. Lee Partners, LP has agreed to adjust the size of its previously announced private placement investment to $139 million. That deal had originally priced at $555 million on May 3.

Both investors will receive substantially the same terms.

The common shares will be issued at $0.20 per share, while the series D convertible participating voting preferred shares will be sold at $92.00 each.

The preferreds are mandatorily convertible into 460 common shares.

Upon closing of both deals, Warburg and Thomas. H. Lee Partners will hold approximately 40% equity interest in Sterling.

"We are pleased to announce Warburg Pincus as an investor in Sterling," said Greg Seibly, Sterling's president and chief executive officer, in a press release. "Warburg Pincus is a highly successful bank sector investor that has long-standing and deep knowledge of our company. We believe that the combination of Warburg and THL represent key components in our efforts to recapitalize the company."

Calls seeking further comment were not returned Monday.

Sterling's stock (Nasdaq: STSA) gained 11 cents, or 14.87%, to $0.86. Market capitalization is $48.3 million.

Hampton Roads announces capital raise

Hampton Roads Bankshares announced a $275 million capital raise plan that includes a $255 million private placement of equity, as well as a $20 million rights offering.

Both deals will carry the same terms.

For the private placement, Hampton has lined up the Carlyle Group and Anchorage Advisors LLC, as well as other institutional investors. Carlyle and Anchorage will invest approximately $73 million each, purchasing approximately 168.8 million common shares apiece.

Upon closing, Carlyle and Anchorage will each hold a 23.1% voting interest in the Norfolk, Va.-based financial institution.

The private placement investors also will have an option to augment their investments if existing shareholders do not subscribe for the entire $20 million rights offering.

Additionally, Hampton is in talks with the U.S. Treasury Department to exchange its series C cumulative preferred shares for mandatorily convertible preferred stock. The Treasury had purchased the shares in 2008 under the Capital Purchase Program.

Each $1,000 of series C preferreds is exchangeable for 581.4 shares of the convertible preferreds.

According to a person familiar with the transaction, Hampton has been seeking to solidify its balance sheet since August 2009, when it announced a public stock offering. That offering was later withdrawn, though the company did not specify why.

"The investment represents an important step forward for the company, our shareholders, employees and the communities we serve," said John A.B. "Andy" Davies, Jr., president and CEO, in a press release.

"As a leading community bank in our regions, our goal is to serve and grow with our customers and communities for many years to come. The capital we are raising will substantially strengthen our balance sheet and provide a solid foundation for the future.

Hampton Road's shares (Nasdaq: HMPR) improved by 29 cents, or 17.37%, to $1.96. Market capitalization is $43.2 million.

R.G.I. aims for $90 million

R.G.I. International is seeking up to $90 million via a private placement of stock.

Synergy Classic Ltd. is the investor.

The deal could come in multiple tranches, with the first closing consisting of the sale of 1.8 million ordinary shares at $5.00 per share. Synergy will then have the option to purchase another 34.2 million shares by July 14 for another $81 million.

"We are delighted to have signed this agreement with a new investor who has a strong understanding of the potential of the Moscow real estate market," said Jacob Kriesler, executive chairman, in a news release. "The market is showing sustained signs of recovery and this will provide additional capital for developing our projects and taking advantage of new investment opportunities."

R.G.I.'s equity (London: RGI) closed at 2.1p. Market capitalization is £175 million.

R.G.I. International is a developer of quality residential and retail properties within Moscow and the surrounding areas and is based in St. Peter Port, England.

Cell Therapeutics plans direct offering

Cell Therapeutics announced a $21 million registered direct offering of stock.

Three unnamed investors have agreed to participate in the financing, according to a press release.

The company will sell 21,000 series 5 preferred shares in the transaction at $1,000 per share, with each share being convertible into about 2,500 common shares at an initial conversion price of $0.40 per share.

Additionally, the investors will receive warrants equal to 26.25 million common shares. The warrants are exercisable at $0.50 for four years, six months and one day.

"The company intends to use the net proceeds from the offering for working capital and general corporate purposes, which may include, among other things, paying interest on and/or retiring portions of its outstanding debt, funding research and development, preclinical and clinical trials, the preparation and filing of new drug applications, and general working capital," Cell Therapeutics said in the release.

Settlement is expected by May 27.

Calls seeking further comment were not returned Monday.

Cell Therapeutics' stock (Nasdaq: CTIC) fell 11 cents, or 23.56%, to $0.34. Market capitalization is $243 million.

Cell Therapeutics is a Seattle-based biopharmaceutical company focused on the development of cancer treatments.

Global Earth secures credit line

Global Earth Energy inked a deal with Dutchess Opportunity Fund, II, LP for a $10 million line of credit, the company said in a press release.

Dutchess will purchase common shares up to the total amount over the course of three years.

"The proceeds of our equity financing will be used primarily to fuel the U.S. expansion of our newly acquired subsidiary RCI Solar," said Syd Harland, in the release.

"As Western Canada's rapidly growing solar energy company, RCI Solar has the potential to scale up its distribution capacity and increase its market share in both in Canada and the U.S. Given President Obama's recovery act funding and extension of the solar energy tax credit, photo voltaics are experiencing a surge in demand. RCI Solar is poised to capitalize on this favorable regulatory environment that is ushering in the adoption of cleaner and sustainable solar energy systems.

"This financing structure has a proven track record and we are excited to be working with Dutchess Opportunity Fund," Harland added. "We look forward to building a long term relationship with their experienced and well-established team."

Global Earth's shares (OTCBB: GLER) increased 2 cents, or 37.5%, to $0.06. Market capitalization is $1.22 million.

Global Earth Energy is a Buffalo, N.Y.-based provider of renewable energy products and services to residential and commercial markets in North America.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.