Romarco upsizes deal to C$24.32 million; BPZ to raise $48 million; Xata, Santa Fe sell convertibles

By Kenneth Lim

Boston, Feb. 13 - Romarco Minerals Inc. said it is taking advantage of a strong stock price as the company upsized a stock and warrant placement to C$24.32 million.

BPZ Resources, Inc. plans to raise about $48 million through a placement of common shares with 13 investors.

Xata Corp. took in $3.1 million through a sale of convertible preferred stock that it said will help boost operating cash.

Santa Fe Holding Co. sold $3 million of convertible debentures and warrants to two private equity funds.

Romarco upsizes deal

Romarco Minerals increased a private placement of units to C$24.32 million. The deal priced Thursday for C$20.52 million.

The company now plans to sell 64 million units of one common share and one half-share warrant at C$0.38 apiece on a bought-deal basis. Each whole warrant will be exercisable at C$0.60 for two years.

Romarco common stock (TSX: R) rose C$0.02 to close at C$0.37 on Friday. The company has a market capitalization of C$74.4 million.

There is a greenshoe for an additional C$3.08 million, or 8.1 million units.

Proceeds will be used for exploration and development of the Haile Gold Mine and general corporate and working capital purposes.

Vancouver, B.C.-based Romarco is a mineral exploration company.

"We are extremely pleased," Romarco president and chief executive Diane Garrett told Prospect News. "It was all subscribed for. We've been going public with it. We've just been on a two-week marketing trip. We're doing an extensive marketing trip, getting visibility out of the company, and people are liking what they see. It's a very near-term financing opportunity."

The company decided not to raise money, which could last Romarco at least 24 months, through debt because that market's current problems, Garrett said.

"We were offered some debt, and because of the health of the markets we decided against that," she said. "You get a real discount for doing debt and that's a negative."

Raising equity capital would allow the company to take advantage of recent gains in its stock price, she added.

"Our stock has doubled in the last three weeks," Garrett said. "It's looking very strong, and when they offered us an equity financing, the board decided to take it."

BPZ to raise $48 million

BPZ Resources will place about $48 million of its common stock with 13 institutional investors.

The company is selling about 15.7 million shares at $3.05 apiece. BPZ common stock (NYSE: BPZ) rose 27.46% or $0.92 to close at $4.27 on Friday. The company has a market capitalization of $336.4 million.

Proceeds will be used primarily to fund the ongoing oil development in the Corvina and Albacora oil fields in the company's offshore Block Z-1 and for general corporate purposes.

BPZ is an oil and gas exploration and production company based in Houston.

"This equity raise was undertaken to help assure the company can continue operations to increase production in Corvina, and grow new reserves and bring on new production from Albacora," BPZ president and chief executive Manolo Zúñiga said in a statement. "The support of the institutions participating in this equity raise should give the market an indication of the strength of our asset base and the upside we could see in the future.

"We continue to work toward closing the Natixis reserves based financing, as this equity raise will strengthen the balance sheet of the company which should allow potential banks participating in the $90 million debt facility to assume less risk," he added. "The new equity, the expected free cash flow from our growing operations, and the remaining $35 million of the initial $50 million borrowing base from the Natixis facility, which is expected to grow as we increase production and reserves, should allow us to move forward with the capital expenditures previously announced totaling approximately $86 million for 2009."

The stock placement drew support from existing and new investors, Zúñiga said.

"I am very pleased that our largest investors stepped in at this critical time, and that we also attracted a series of new investors, which demonstrates the support our investors have delivered through this offering," he said. "We are in a stronger position to continue growing the company."

Xata raises $3.1 million

Xata sold $3.1 million of new series E convertible preferred shares to existing investors Trident Capital Management and Weber Capital Management.

The preferreds, which were sold at $2.22 apiece, are convertible into Xata common stock at $2.22 per common share. The investors also received warrants for 406,759 common shares, exercisable at $2.22 for seven years.

Xata common stock (Nasdaq: XATA) rose 7.6% or $0.19 to close at $2.69. Xata's market capitalization is $23.6 million.

Proceeds will be used to strengthen the company's balance sheet by providing operating cash and to repay $1.75 million of seller notes incurred in the acquisition of Geologic Systems, Inc.

Xata develops fleet management systems for transportation companies. The company is located in Burnsville, Minn.

Trident currently has a 38% ownership stake in Xata, while Weber controls about 4% of Xata's shares.

"In the past year, Xata has made considerable progress within its industry to significantly expand its market share and prove out its business model as a subscription-based service," Trident managing director Don Dixon in a statement. "We're excited by the company's strong growth in what is a very difficult economic climate."

Weber Capital managing partner Gene Weber added: "We continue to view Xata as a strong leader in fleet optimization for the trucking industry. We believe Xata has the management team, products and services in place to make them a formidable player within the industry."

Santa Fe sells convertibles

Santa Fe Holding raised $3 million in a private placement of convertible debenture securities and warrants.

The securities were sold to two private equity funds. The company did not disclose further details about the deal.

Santa Fe common stock (SFHD) closed at $1.20 on Friday, unchanged from the previous session.

Santa Fe is a restaurant holding company in Brentwood, Tenn.

"We continue to raise capital to facilitate expansion at a faster pace," Santa Fe chairman Danny York said in a press release. "But it has been important to us that any capital raised is done on a friendly basis and fair to the company and our shareholders. Midtown has done an excellent job for us in finding strategic partners who understand our true potential and are interested in investing with us for the long term."

"The two funds that have recently taken positions in the company did so in a convertible security which can be converted to restricted common stock at any time," he continued. "This is the same type of investment these funds have made with Santa Fe in the past and have converted their past positions into equity. These investment groups have continued to show a commitment to the long-term success in Santa Fe. Their continued support gives us the time and resources to execute our growth strategy and build shareholder value."

The proceeds will be used to add locations in 2009, he said.

"The additional capital will give us the ability to lock up additional locations for 2009 and the flexibility to add additional locations in 2009 if the right opportunity presents itself," York said. "The company has opened two new locations in January and expects to open four additional company stores and four franchise units. We will always be open to additional equity investments in our company as long as the capital is committed to staying with us long term and the terms of the investment is not only fair to our current shareholders but adds value to the overall enterprise."

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