Motient closes $408.5 million private placement; oil prices hold off energy issuers

By Sheri Kasprzak

Atlanta, April 18 - Motient Corp. led private placement news to kick off the week, wrapping up a $408.5 million offering.

The company sold 408,500 preferred shares at $1,000 each to 39 institutional investors.

The preferreds pay annual dividends of 5.25% in cash or 6.25% in stock. The company may pay dividends in stock after two years.

The preferreds are convertible into common shares at $33.33 each.

After the closing was announced Monday morning, Motient's stock dipped and ended the day down $2.25, or 9%, to close at $22.75.

"They obviously had a great response," said one market source who had seen the offering. "They managed to get it done and I think it went reasonably well for them. I think the conversion price may be a bit high, but evidently the investors are content with that."

Motient, based in Lincolnshire, Ill., provides wireless data technologies to corporations. The proceeds will be used to acquire newly issued common stock of TerreStar Networks Inc., a subsidiary of Mobile Satellite Ventures. The remainder will be used for general corporate purposes.

Elsewhere, sell-siders said retreating oil prices may continue to affect private placement issuance this week.

"We fully expected to see more energy companies out there, given the jump we saw late last week, but then we had a drop today," said one sell-sider. "I believe it's fair to say energy companies are sitting back and waiting for now."

Oil lost $0.12 to close at $50.37 per barrel on Monday.

Western Lakota's C$25.2 million offering

In the oil sector, Western Lakota Energy Services Inc. said it plans to head to the private placement market with a C$25.2 million offering.

The company plans to sell 4.8 million subscription receipts at C$5.25 each.

The subscription receipts are exchangeable for common shares on a one-for-one basis upon the completion of the company's acquisition of Hemsing Drilling Ltd. The acquisition is expected to close May 17.

"Well, they saw their stock up early in the day, not long after it was announced, so I think that's good news," said one sell-sider who had seen the deal. "I don't think their drop [in stock] was because of the offering, but probably because of broader market conditions. I would say it looks like a solid deal."

On Monday, the company's stock closed down C$0.14 to close at C$5.33.

The offering is being placed through a syndicate of underwriters led by Peters & Co. Ltd.

Based in Calgary, Western Lakota is an oil and natural gas drilling contractor. It plans to use the proceeds from the private placement to partially fund the company's acquisition of Hemsing.

Magal plans direct offering

Moving away from private placements, Israel's Magal Security Systems Ltd. announced its plans to raise $16,328,500 in a direct placement.

The company plans to sell 1,275,000 shares at $9.50 each and 425,000 shares to insiders of the company at $9.92 each.

"It's priced right in line," said one market source. "[Their] stock responded positively."

After the deal was announced Friday, Magal's stock climbed $0.21 to close at $9.72.

Lehman Brothers Inc. was the placement agent in the offering.

Based in Yehud, Israel, Magal produces security products, including motion detectors, and provides security management. The company plans to use the proceeds for general corporate purposes and working capital.

Trust gets equity line

Trust Licensing, Inc. received a $10 million standby equity distribution agreement from Cornell Capital Partners, LP.

The company will sell shares at 98% of the lowest volume weighted average price of the company's stock for five trading days before notice of a draw over the course of two years.

Trust also issued a warrant for 200,000 shares, exercisable at $0.01 each for two years.

"We are pleased to announce these significant funding commitments, a major step in our company's early history," said Jeffrey Sass, the company's president and chief executive officer, in a statement. "These funds will enable us to begin to implement our plan and make progress in several areas, including further development of our portfolio of intellectual property, enforcement of our issued patent and sales and marketing activities related to seeking out additional licensees."

Based in Plantation, Fla., Trust Licensing is a technology and intellectual property company. The proceeds will be used for corporate growth.

On Monday, the company's stock closed unchanged at $0.05.

Protein Polymer raises $3.58 million

Protein Polymer Technologies, Inc. raised $3,583,226 in the final tranche of a $7,783,554 private placement.

Protein Polymer issued 10,858,261 shares at $0.33 each.

The investors also received warrants for 5,429,130 shares at $0.50 each for four years.

In all, the company sold 23,586,528 shares at $0.33 each and issued warrants for a total of 11,793,262 shares at $0.50 each, exercisable for four years.

A total of $1.2 million were raised through the conversion of previously issued short-term promissory notes.

"This cash infusion reflects the confidence of the investment community in the development and commercialization of Protein Polymer's product candidates, research pipeline and business strategy," said William Plamondon, the company's chief executive officer, in a statement.

He said proceeds will be used to expand clinical trials and accelerate development of the company's manufacturing process.

Based in San Diego, Protein Polymer develops products using protein design and synthesis for medical and surgical uses. The proceeds will be used to fund the company's research and clinical programs. The remainder will be used for general corporate purposes, including potential acquisitions.

Protein Polymer's stock closed down $0.08 at $0.82 Monday.

Birchcliff's stock drops after Veracel deal

Birchcliff Energy Ltd.'s stock continued to drop Monday after announcing Veracel Inc., a company it plans to acquire, will raise C$114 million in a private placement.

Birchcliff's stock closed down C$0.08 at C$4.01 Monday after losing C$0.16 to close at C$4.09 Friday.

Veracel plans to sell subscription receipts at C$4 each and flow-through shares at C$5 each.

The receipts are exchangeable for one common share after Birchcliff Energy Ltd acquires it.

Based in Calgary, Alta., Veracel is a biotechnology company focused on cancer research.

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