Magellan CEO buys 10% convertibles; Golden Grain completes offering; GeoPetro sells preferreds

By Stephanie N. Rotondo

Portland, Ore., May 1 - Magellan Aerospace Corp. announced Friday it had raised C$40 million through a private placement of convertible debentures.

The notes were sold to the company's chief executive officer, who currently owns about 28% of the company's outstanding equity. Upon conversion, his stake will increase to 77%.

Meanwhile, Golden Grain Energy LLC wrapped a $2.75 million financing. The company sold membership units to raise the funds.

GeoPetro Resources Co. is issuing new preferred shares in its efforts to raise $1.85 million. Proceeds will be used to increase production.

Among other mining companies, Red Rock Resources plc said it concluded a £3 million equity investment.

Magellan CEO buys converts

Magellan Aerospace sold C$40 million worth of convertible debentures to its chief executive officer, the company announced.

The three-year 10% convertible secured subordinated notes are convertible into common stock at C$1.00 per share.

N. Murray Edwards, Magellan's CEO, currently owns approximately 28% of the company's common shares, along with approximately 50% of the company's outstanding preferred shares. Murray also holds approximately 83.5% of Magellan's 2008 convertible debentures, which are being tendered for, the company said. Murray has indicated he will be tendering all of those notes.

Upon conversion of the new notes, Murray will acquire 40 million additional common shares, increasing his stake to 77%.

Magellan's equity (Toronto: MAL) gained 6 cents, or 5.5%, to C$1.15. Market capitalization is C$20.9 million.

Magellan Aerospace is a Toronto-based supplier for the aerospace industry.

Golden Grain completes offering

Golden Grain Energy raised $2.75 million via a private placement of membership units, according to a regulatory filing.

The company sold approximately 1.68 million of the class A redeemable membership units on April 17 for $1.68 million. Approximately 1.07 million of the units sold on April 30 for $1.07 million.

On Feb. 16, Golden Grain suspended trading of the membership units to "undertake a private equity offering," according to the company's web site. The company said trading would resume after the financing was either completed or terminated.

Golden Grain does not trade publicly.

Golden Grain Energy is a Mason City, Iowa-based producer of ethanol and distiller's grains.

GeoPetro sells preferreds

GeoPetro Resources said it arranged a private placement of series B convertible preferred shares in a regulatory filing.

Under the terms of the deal inked April 30, the company issued approximately 2.46 million preferreds at $0.75 per share. The shares are convertible into common stock at a one-for-one basis. That conversion is subject to adjustment.

The company will take in $1.85 million from the financing.

Proceeds from the fundraising will be used to increase production, a source familiar with the situation told Prospect News.

The source, which declined to be named, said that production is currently at 7 million cubic feet, and plans to increase production to 12 million to 15 million cubic feet are already in place. Another 10 million cubic feet will be added after the company completes a workover at its Mitchell well, the source added.

Completion of the production increase is expected in the third quarter.

The source said the company was relatively pleased with the outcome of the deal, though it would have liked to have a higher stock price. Still, the terms were deemed to be attractive to investors.

"Debt is very hard to assume right now, even though we have a nominal amount of debt on our balance sheet," the source stated.

GeoPetro's stock (Amex: GPR) moved up $0.0499, or 7.92%, to $0.6799. Market capitalization is $23 million.

GeoPetro Resources is a San Francisco-based oil and natural gas company.

Red Rock secures equity

Red Rock Resources negotiated a £3 million standby equity distribution agreement with YA Global Master SPV Ltd., according to a press release.

YA agreed to purchase stock over the next two years in multiple tranches. The price per share will be determined by current market price at the time of purchase.

"In the opinion of the directors, the SEDA offers a means of raising funds at a cost competitive with that of alternative equity financing opportunities that are currently available for companies of a similar size to Red Rock," the company said in a statement. "The directors believe that the availability of this additional funding channel enhances the company's financial security and ability to plan, and will therefore help underpin Red Rock's future growth."

Red Rock's shares (London: RRR) closed at 1.10p. Market capitalization is £4.86 million.

Red Rock Resources is a London-based mineral exploration and development company focused on iron ore, uranium and manganese in Western Australia, Tasmania, Zambia and Malawi.

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