Mineral, gold issuance recovers slightly; Lexar Media raises $60 million

By Sheri Kasprzak

Atlanta, March 29 - Private placement issuance among natural resources companies made a slight recovery Tuesday as stocks in that sector improved, market sources said.

"Gold is making a bit of a comeback," said one market source familiar with resources stocks. "I think prices were up almost $2 on the day. Other resources seem to be recovering as well. We are seeing a few more issuers in those sectors today."

Among the natural resources offerings in the market Tuesday was a C$4 million deal from gold exploration company Beaufield Consolidated Resources Inc.

Some energy companies also found themselves back in the private placement game Tuesday as oil prices improved.

"We're seeing some oil deals," said another market source in Canada. "I wouldn't count on seeing a lot of these companies since oil has been up and down a lot lately, but they might surprise me."

Oil gained $0.18 Tuesday to close at $54.23 per barrel.

Among oil companies offering up deals were Highview Resources Ltd. and Avery Resources Inc.

Leading private placement news was a $60 million offering from Lexar Media, Inc.

The company sold senior convertible notes to two institutional investors.

The notes bear interest at 5.625%, mature April 1, 2010 and are convertible into common shares at $6.68 each, a 30% premium to the company's current market price.

Based in Fremont, Calif., Lexar develops digital media and accessories for digital photography and consumer electronics. It plans to use the proceeds for working capital, including the repayment of debt, and for general corporate purposes.

On Tuesday, Lexar's stock closed down $0.08 at $5.14 but gained $0.05 in after-hours trading.

First Potomac's $44.9 million offering

Moving away from private placements, First Potomac Realty Trust said it is close to wrapping up a $44,997,500 direct offering.

The company plans to sell 2,050,000 shares at $21.95 each to RREEF America, LLC.

The shares are being sold under First Potomac's shelf registration.

"It looks okay," said one market source who had seen the deal. "Their stock has been pretty solid and it's a direct placement."

Based in Bethesda, Md., First Potomac develops, acquires and operates industrial properties.

The company's stock gained $0.12 to close at $22.17 Tuesday.

Points plans C$15.8 million deal

Points International Ltd. announced its plans Tuesday to raise up to C$15,808,000 in a private placement.

The offering includes up to 18.1 million shares at C$0.68 each and one convertible preferred share for C$3.5 million.

The preferred is convertible into 4.5 million common shares at C$0.77 each.

"We have attracted an impressive group of new investors who share our belief that Points International is well positioned to provide unique and valuable services to the millions of members of the world's most successful loyalty programs," said Rob MacLean, the company's chief executive officer, in a statement.

"This financing will allow us to accelerate the development of our consumer offering and we are now even better positioned to commence an aggressive marketing campaign, capitalizing on many of the new features that will augment our member's experience."

Merriman Curhan Ford & Co. is the placement agent in the offering.

Based in Toronto, Points International operates a web site that offers an earn-and-swap miles and points program. Proceeds will be used for marketing, technology development and working capital.

Points International's stock closed down C$0.003 at C$0.705.

Rutter plans C$11 million offering

Rutter Inc. announced its plans to head to the private placement market with a C$10 million debenture offering and a C$1 million stock offering.

The debenture bears interest at 10% annually, matures June 30, 2008 and is convertible into common shares at C$1 each.

The company may redeem up to C$5 million of the principal amount of the debenture at a price equal to 102% of the principal plus interest for 45 days after one year following the closing date.

"What this last mechanism allows Rutter to do is prevent conversion of up to C$5 million of these debentures in the event that we see an improvement in our cash position either through sales growth and/or settlement of the SEA change orders that has caused us this difficulty," said Donald Clarke, the company's chief executive officer and chairman, in a statement.

"We are also free to replace that C$5 million with non-convertible debt should that opportunity arise. Under the circumstances, this is a fair-minded way to reward our new lenders for the additional risk they are undertaking while preserving the opportunity for all shareholders to participate in an improved outlook without unnecessary independent members of the Rutter board and the leadership team is very pleased with both the terms and the candor with which our new lenders have approached this restructuring of our balance sheet. Everyone is in a better position moving forward."

As a condition of the debenture offering, officers and directors of the company will buy 1 million shares at C$1 each.

McFarlane Gordon Inc. is the placement agent.

Based in St. John's, Newfoundland, Rutter manufactures voice recording equipment for boats. The proceeds will be used to repay a C$5.6 million long-term debt with Bank of Montreal Capital Corp. and Business Development Bank of Canada. The remainder will be used to reduce debt and for working capital.

Rutter's stock closed up C$0.04 at C$0.88 Tuesday.

China Diamond wraps C$2.5 million deal

China Diamond Corp. has completed a private placement for C$2,509,999.

The company issued 20,916,666 units at C$0.12 each.

The units include one share and one warrant. The warrants allow for an additional share at C$0.16 each for one year.

IBK Capital Corp. was the placement agent in the offering.

"The funds that have been raised would allow us to complete our planned 2005 exploration and mine development work programs for our projects in China," said Mike Michaud, the company's president, in a statement.

"We are excited with the prospect of completing the 2005 exploration plans on both our 703 and Huixian properties. The preliminary results have been successful in showing that these properties are very prospective and we are confident that the planned 2005 work programs will increase the value of these projects. The company's ability to now complete the 2005 phase of the 701 mine capital development program is the next step in transforming the 701 mine to a more efficient and profitable mining operation."

Based in London, Ont., China Diamond is a diamond and gold exploration company. It plans to use the proceeds from the deal to further its exploration of diamond and gold prospects in China.

The company's stock closed up C$0.005 at C$0.105 Tuesday.

Pathmark's stock drops

After two days of stock gains following the announcement of its $150 million private placement offering, Pathmark Stores, Inc.'s stocks fell Tuesday.

The company's stock lost $0.08 to close at $6.11.

On Thursday, when the deal was announced, Pathmark's stock gained $1.44 to close at $5.92 and gained another $0.07 in after-hours trading.

The company's stock gained $0.27 to close at $6.19 Monday, but lost $0.02 in after-hours trading.

The grocery store operator plans to sell shares at $7.50 each to The Yucaipa Cos., LLC this summer.

Pathmark, based in Carteret, N.J., operates a chain of grocery stores.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.