Loral Space, Lear head up PIPE action with two substantial deals; Patron raises $10 million

By Sheri Kasprzak

New York, Oct. 17 - Private placement action on Tuesday took off, led by two large offerings from Loral Space & Communications Inc. and Lear Corp.

Meanwhile, stocks backed off and oil prices dropped by $1.01 to close at $58.93 per barrel.

In the Loral offering, the company issued $41 million in series A convertible preferred stock and $259 million in series B convertible preferreds. The 7.5% preferreds are convertible into common shares at $30.15 each.

The preferreds were purchased by MHR Fund Management LLC.

Proceeds will be used for internal and external growth opportunities in the satellite communications industry.

After the offering was announced Tuesday afternoon, the stock gained 17 cents, or 0.65%, to close at $27.09 (Nasdaq: LORL). Volume of Loral stock traded took off with 46,933 shares traded compared with 25,129 shares traded on average.

"This financing significantly expands Loral's equity base and greatly enhances Loral's ability to grow its business and take advantage of emerging opportunities in both the satellite services and satellite manufacturing markets," said Michael Targoff, the company's chief executive officer, in a statement.

"An equity investment of this size is an extraordinary achievement for Loral and it strengthens our ability to play an enhanced role in the satellite industry. We are grateful for MHR's confidence and support and for the efforts of the special committee."

Moving to Loral's latest earnings statement, the company reported a net loss of $11.40 million for the quarter ended June 30, compared with a net loss of $7.41 million for the corresponding 2005 quarter.

Loral, based in New York, is a satellite communications company.

Lear to raise $200 million

In the Lear offering, the company plans to sell $200 million in stock to Icahn Partners LP, Icahn Partners Master Fund LP and Koala Holding LLC.

News of the placement sent the company's stock up by 15.25%, or $3.75, to close at $28.34 (NYSE: LEA). The stock slipped by 4 cents in after-hours trading.

The offering includes up to 8,695,653 shares at $23.00 each. The price per share is a 6.4% discount to the company's closing stock price of $24.59 on Monday.

As of Aug. 4, Lear had 67,348,122 outstanding common shares.

The deal is expected to close within the next 45 days.

Proceeds will be used for strategic investments and working capital.

Chief financial officer James Vandenberghe said he could not comment on the deal, and CEO Robert Rossiter did not immediately return calls for comment on the deal Tuesday.

"Our increased investment reflects our confidence in Lear's management team and our optimism about the future value of the company," said Carl Icahn, head of Icahn Partners, in a news release. "We look forward to the opportunity to work actively with management and the other members of the Lear board to help increase value for all shareholders."

Separately, the company is preparing to release its third-quarter earnings statement on Oct. 26. For the third quarter, Lear expects to post net sales of $4.1 billion and a pre-tax loss between $60 million and $70 million.

For the quarter ended July 1, the company reported a net loss of $6.4 million, compared with a second-quarter 2005 net loss of $44.4 million.

Located in Southfield, Mich., Lear is an automotive components supplier.

Patron raises $10 million

Looking to the tech sector, Patron Systems, Inc. announced the completion of a $10 million private placement of series B convertible preferred stock.

The company issued 2,000 shares of the preferreds at $5,000 apiece. The 10% preferreds are convertible into common shares at the lesser of $2.40 each or the volume weighted average closing price for the 10 trading days before conversion.

Laidlaw & Co. (UK) Ltd. was the placement agent.

The investors in the offering were led by Apex Investment Fund V, LP.

The stock remained unmoved at $2.00 Tuesday (OTCBB: PTRN).

Based in Boulder, Colo., Patron provides information security software to government entities and corporations.

ProspEx plans offering

Looking to Canadian offerings, ProspEx Resources Ltd. negotiated the terms of a C$15.12 million private placement offering of up to 1.4 million flow-through shares and 1.8 million non flow-through shares.

The flow-through shares are priced at C$5.40 each and the non flow-through shares at C$4.20 each.

The deal is being placed through a syndicate of agents led by Tristone Capital Inc.

The placement is set to close Nov. 1. Proceeds will be used for exploration and development as well as working capital.

Calgary, Alta.-based ProspEx is an oil and natural gas exploration and development company focused on natural gas properties in the Western Canadian Sedimentary Basin.

In other resources-related news, International Wayside Gold Mines Ltd.'s stock climbed on Tuesday after the company settled a C$10.5 million private placement on Monday.

The stock gained 4.55%, or a penny, to end at C$0.23 (TSX Venture: WGM). The stock lost 12%, or 3 cents, to end at C$0.22 on Monday when the deal was announced.

In the offering, the company intends to sell flow-through shares at C$0.25 each and up to C$7.5 million in non flow-through shares. The price per non flow-through share could not be determined.

Octagon Capital Corp. is the agent.

International Wayside is a Vancouver, B.C.-based gold exploration company.

Vical stock edges up

A day after concluding a $12.55 million direct offering, Vical Inc.'s stock climbed slightly on Tuesday.

The stock advanced by 3.47 cents, or 0.67%, to settle at $5.2247 (Nasdaq: VICL). On Monday, the company's stock gained 9 cents to end at $5.19.

The volume of Vical shares traded Tuesday remained slightly elevated with 106,395 shares traded, compared with an average of 92,132 shares. On Monday, there were 224,109 shares traded..

In the placement, the company sold shares at $5.02 each, a 1.5% discount to the company's $5.10 closing stock price from Friday.

Vical, based in San Diego, develops DNA-based vaccines for infectious diseases and cancer.

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