Max Petroleum negotiates $75 million convertible bond issue; Rand raises $13 million in stock sale

By Sheri Kasprzak

New York, Aug. 2 - An oil company led PIPE primary market activity yet again on Wednesday as oil prices continued to rise for the third straight session.

Oil prices gained 94 cents on Wednesday to end the day at $75.85 per barrel after gaining 61 cents on Tuesday to close at $74.91 per barrel. On Monday, oil prices climbed by $1.06 to close at $74.30 per barrel.

London's Max Petroleum plc released preliminary terms of private placement of convertible bonds Wednesday morning and later upsized and finalized the terms for up to $75 million from the originally anticipated $65 million.

The 6.75% bonds are due in 2011 and are convertible into common shares at 133p each, a premium of 24% to the volume weighted average price of the company's stock for the 30 consecutive trading days before pricing.

If the bonds are not converted, they will be redeemed at par on Sept. 8, 2011.

At the end of the day, Max's stock fell 3.5%, or 4.25p, to end the day at 117.50p (London: MXP) and volume of the company's shares traded skyrocketed. A total of 14,649,823 shares were traded on Wednesday, compared to the average 637,241 shares.

"We are delighted that our capital raising has been such a success and welcome all our new investors," said chairman Jim Jeffs in a news release. "Achieving the maximum offer size means we can now proceed at optimum speed and accelerate our intermediate drilling program to take advantage of the extraordinary opportunity which has presented itself to us.

"With the proceeds of this issue, we expect to meet all of our shallow, intermediate and deep-drilling commitments and objectives through 2007 and our aim is that the company should be self-funding by 2008."

JPMorgan Cazenove Ltd. is the bookrunner.

Proceeds from the offering will be used to accelerate and expand the company's drilling program in the A&E blocks in Western Kazakhstan.

Max Petroleum, based in London, is an oil and natural gas exploration company.

In the broader market, one sellside source said stocks may have been up, but climbing oil prices may be putting some issuers off because the threat of higher oil threatens the stock market as well.

"Stocks may look fine, but oil is still up there," he noted. "It always sends everyone into a frenzy. Unfortunately, it doesn't look like it [oil] is going to be retreating any time soon. You factor in the troubles in the Middle East and the fact that it's summer and we're probably looking at record highs."

Meanwhile, the Dow Jones Industrial Average climbed 74.20 to close at 11,199.93; the Nasdaq composite index gained 16.82 to settle at 2,078.81; and the Standard & Poor's 500 composite index finished the day up 7.63 to close at 1,278.55.

Rand raises $13 million

Elsewhere in PIPE action, Rand Logistics, Inc. concluded a $13 million stock offering Wednesday.

A large group of investors purchased 2,402,957 shares at $5.41 each.

The investors included Islandia LP; Knott Partners LP; Matterhorn Offshore Fund Ltd.; CommonFund Hedged Equity Co.; Shoshone Partners, LP; Finderne, LLC; Good Steward Trading Co. SPC; Mulsanne LP; The Hummingbird Value Fund LP; The Hummingbird Microcap Value Fund LP; Terrier Partners LP; Performance Partners, LP; Performance Partners, Ltd.; WTC-CIF Micro Cap Equity Portfolio; WTC-CTF Micro Cap Equity Portfolio; WTC-CIF Global Infrastructure Portfolio; Ratheon Master Pension Trust; Clariden-LUX Infrastructure Fund; Wynnefield Partners Small Cap Value, LP; Wynnefield Partners Small Cap Value, LP I; and Wynnefield Small Cap Value Offshore Fund, Ltd.

The stock advanced by 2 cents on Wednesday to settle at $5.42 (OTCBB: RAQC).

New York-based Rand provides bulk freight shipping services in the United States and Canada.

Killam prices offering

Heading to Canadian private placement offerings, Killam Properties Inc. finalized the pricing terms of a private placement for C$15,088,000.

The offering includes up to 6.56 million shares at C$2.30 each.

The deal is scheduled to close Aug. 21.

The placement was first announced on July 31 and was priced Wednesday afternoon. At the end of the day, the company's stock had climbed 9 cents, or 3.78%, to end at $2.47 (Toronto: KMP). When the deal was first announced, without terms, the stock gained 2 cents to close at C$2.40.

The offering is being placed through a syndicate of agents led by Desjardins Securities Inc.

Proceeds will be used to fund recent acquisitions and future growth.

Killam, based in Halifax, N.S., is a real estate company and manages multi-family residential rental properties.

Airspan stock jumps

In secondary market activity, Airspan Networks, Inc.'s stock skyrocketed, gaining 14% after closing a $29 million private placement of convertible preferreds on Tuesday.

The stock climbed by 27 cents to close the day at $2.20 (Nasdaq: AIRN), gaining another 3 cents in after-hours trading.

The stock ended Tuesday up 5 cents, or 2.66%, at $1.93 and added another penny in after-hours trading.

In the placement, Oak Investment Partners XI, LP bought 100,000 shares of series B preferreds.

Each preferred is convertible into 100 common shares.

Airspan, based in Boca Raton, Fla., provides fixed and wireless voice and data systems, including voice-over-internet protocol.

Bank Holdings stock dips

The Bank Holdings saw its stock slip on Wednesday.

The company's stock fell by 1.45%, or 26 cents, to end the session at $17.68 (Nasdaq: TBHS). On Tuesday, when the deal closed, the company's stock gained 0.63%, or 11 cents, to end at $17.94.

On Tuesday, the company sold 678,740 shares for proceeds of $11,583,580.

The deal was conducted to help pay for the cash portion of Bank Holdings' merger with NNB Holdings, the holding company for Northern Nevada Bank.

Reno, Nev.-based Bank Holdings is the parent company of Nevada Security Bank.

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