AgFeed inks $50 million credit line; Geron gets capital infusion; MacDonald settles unit sale

By Stephanie N. Rotondo

Portland, Ore., Sept. 10 - Thursday's private placement market was a mishmash of sizes and sectors, as deals ranged from the single to double digits from a variety of companies.

AgFeed Industries Inc. said it received a $50 million equity line of credit from an institutional investor. However, the company said there was "no immediate need" for capital, though the facility will strengthen its bottom line.

Meanwhile, Geron Corp. said it would sell stock to raise $3.6 million in a direct placement. The company will use proceeds to fund an equity contribution to ViaGen Inc.

In other deals, MacDonald Mines Exploration Ltd. said it closed on a C$2.5 million private placement of units.

Across the Pond, Rurelec plc completed a private placement of 12% convertible notes. And Regency Mines plc announced it secured a standby equity distribution agreement.

AgFeed inks $50 million credit line

Agfeed Industries secured a two-year $50 million equity line of credit "with an institutional investor," according to a press release.

Under the terms of the agreement, the investor will purchase common shares at a slight discount to the then-market price.

In addition, the investor will receive warrants equal to 400,000 additional shares, exercisable at $5.75 for five years.

"AgFeed has no immediate need for additional capital, nor current intention to access capital, through this financing tool or any other for the remainder of the calendar year," stated Songyan Li, AgFeed's chairman, in the release. "We believe that this agreement ensures our access to capital, on highly favorable terms, in support of the execution of our long term business plan through 2010 and beyond."

"This financing vehicle enables us to move forward on the implementation of our business plan from a position of strength, by providing us with access to capital without being exposed to the changing market conditions and terms, while at all times allowing us the flexibility to review other opportunities and control our own financing destiny."

"We believe the global economy will continue to affect access to the capital markets over the next two to three years which would, in turn, impact our ability to execute our overall strategy," added Junhong Xiong, president and chief executive officer.

"Accordingly, we, upon advice of our board, working closely with our management and advisors, have taken a strong positive step to assure our ongoing access to capital."

AgFeed's stock (Nasdaq: FEED) gained 8 cents, or 1.55%, to $5.23. Market capitalization is $221 million.

AgFeed Industries is a New York-based animal feed producer with operations primarily in China.

Geron gets capital infusion

Geron, a Menlo Park, Calif.-based biopharmaceutical company, announced a plan to directly place $3.6 million of common stock.

The company will issue 550,000 common shares, as well as warrants equal to 150,000 additional shares. The warrants are exercisable at $9.00 until Sept. 9, 2014.

The funds raised in the financing will be used to fund an equity contribution to ViaGen Inc., a global leader in animal cloning.

Geron currently holds a 27% equity interest in ViaGen.

"ViaGen is the leading animal cloning company," noted David L. Greenwood, Geron's executive vice president and chief financial officer, in a press release.

"It was an early licensee of the nuclear transfer technology that Geron controls and has a demonstrated track record in providing cloning services. This additional capital from Geron, along with the capital being contributed by our ownership partner, Exeter Life Sciences, will allow ViaGen to ramp up their business."

Geron's equity (Nasdaq: GERN) fell a penny, or 0.14%, to $7.36. Market capitalization is $672 million.

MacDonald settles unit sale

MacDonald Mines settled a C$2.53 million private placement of units, the company announced.

The company sold approximately 12.63 million units at C$0.20 apiece. Each unit held one flow-through common share and one half-share warrant. Each whole warrant is exercisable at C$0.25 for two years.

The deal came in three tranches. In the first tranche, 10 million of the units were sold in a non-brokered placement. The second tranche was brokered by IBK Capital Corp. and included the sale of 2 million of the units. In third and final tranche, "insiders and related parties" subscribed for the remaining 625,000 units.

"It's flow-through funds, as we are exploring in two areas of Canada," said J. Kirk McKinnon, president and CEO, in an interview with Prospect News. The areas include La Ronge District of Saskatchewan and its various properties in the McFauld's Lake area of the James Bay Lowlands.

"Investors are always pleased if you have the money to do exploration," he added. "The market is still tough to raise money in and the financiers believe this project is good and so do we."

McKinnon noted that the placement price was at a premium to the company's stock price.

MacDonald's equity (TSX Venture: BMK) improved by C$0.005, or 3.45%, to C$0.15. Market capitalization is C$21.5 million.

MacDonald Mines Exploration is a Toronto-based mineral exploration company.

Rurelec issues convertible notes

Rurelec sold £2.5 million of 12% unsecured convertible loan notes in a private placement, the company said in a news release.

The notes mature March 2011 and are convertible into ordinary shares at 25p per share. Investors will also receive 10 million warrants, which are also exercisable at 25p until the notes mature.

Independent Power Corp. - which is controlled by Rurelec's managing director, Peter Earl - subscribed for £700,000 of the notes and 2.8 million warrants.

The proceeds will be used for refinancing of the company's Argentine power generation business, Energia del Sur.

"It is of great importance to Rurelec that we complete the refinancing of Energia del Sur," Earl said in a statement.

"The convertible loan notes placed today will help us to arrange the debt rating in Argentina which we need to complete our local bond issue. We have been successful in arranging local bond issues in Bolivia to finance our expansion in that country. Now we intend to adopt the same strategy in Argentina, taking advantage of the strong local pension fund market for debt rated corporate bonds.

"We believe that this issue gives the least dilution for the maximum benefit to the group," he concluded. "We maintain our policy of minimal dilution combined with continuing focus on dividends to Rurelec shareholders."

Rurelec's shares (London: RUR) closed at 17.19p. Market capitalization is £36 million.

Rurelec is a London-based company engaged in the acquisition and development of power generation assets in South America.

Regency inks SEDA

Among other issuers from across the pond, Regency Mines said it signed a £3 million standby equity distribution agreement with YA Global Master SPV Ltd.

YA Global has agreed to purchase ordinary stock over the course of two years. The stock will be purchased in multiple tranches at a discount to the market price.

"Regency's goal in securing the SEDA facility is to have in place a facility that will enable Regency to raise capital efficiently at higher valuations as Regency executes its growth plan and communicates positive results," commented Andrew Bell, chairman of Regency, in a statement.

"Having observed the successful use of the SEDA by many AIM companies, we are confident that the SEDA will provide a useful reserve funding instrument for Regency and reduce Regency's overall cost of capital."

Regency's equity (London: RGM) closed at 2.73p. Market capitalization is £8.98 million.

Regency Mines is a London-based mineral exploration company focused on exploring for copper and nickel.

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