Plug Power gears up to settle $217.25 million deal; NovaDel Pharma negotiates $11.7 million stock sale

By Sheri Kasprzak

New York, April 11 - Plug Power Inc. led PIPE news Tuesday with one of the largest private placements of the year and one of the largest investments made in an alternative fuel company - at least according to chief executive officer Roger Saillant.

"This is one extraordinary day for Plug Power," Saillant said in a conference call conducted Tuesday morning. "This is one of the largest investments ever made by a single investor in the alternative energy sector."

Shareholders still must approve the deal, but word of the offering sent Plug's stock skyrocketing early, with the stock advancing 25.2% at 10 a.m. ET. Eventually, the stock settled up 22.54%, or $1.10, to close at $5.98, gaining another 2 cents in after-hours trading.

Volume also took off with a total of 28,550,661 shares traded Tuesday compared to the average 1,137,710 shares traded.

The two investors - ZAO Interros Holding Co. and MMC Norilsk Nickel, both Russian companies - will buy shares through their joint venture company Smart Hydrogen Inc.

Smart Hydrogen will buy 395,000 shares of class B convertible capital stock at $550.00 apiece.

The class B stock is convertible into a total of 39.5 million common shares at $5.50 each, a 12.7% premium to the company's $4.88 closing stock price on April 10.

As of March 10, Plug had 85,985,000 outstanding common shares.

The investors also agreed to buy 1,825,000 common shares of Plug Power from DTE Energy Foundation along with the capital stock offering.

If the shares are not purchased from DTE, Smart Hydrogen will have the option to buy another 18,250 shares of the capital stock for a total of $10,037,500.

The offering is expected to conclude this summer.

Interros, Norilsk and Plug Power have been in talks to complete the private placement since November 2005.

At the time, Greg Silvestri, Plug's chief operating officer, said Interros and Norilsk were interested in making a significant investment in the company and, once the deal closes, will hold 35% of Plug's outstanding stock.

"Right from the beginning, they made it very clear that they wanted to make a significant majority investment and hold a substantial stake in our company," Silvestri said in the conference call. "This really shows their absolute commitment to our company and the broad-based strategy they were pursuing."

"With the aim of pursuing a significant investment, in early 2005 we began a nearly yearlong review of the global fuel cell industry to identify what we believe to be the best companies in the industry," said Vladimir Potanin, Interros' president, in a news release. "The result of this exhaustive review resulted in our approach to Plug Power and this transaction."

"Norilsk Nickel has long supported fuel cell technology research and our investment in Plug Power demonstrates this commitment," said Michael Prokhorov, Norilsk's director general, in a statement. "We believe in Plug Power's potential and in the potential of the hydrogen economy and look forward to helping Plug Power continue its advancement in fuel cell technology."

Looking to the company's latest earnings report, Plug sustained a net loss of $51.74 million for the year ended Dec. 31, 2005, compared to a net loss of $46.74 million for 2004.

The impact the deal will have on the company's earnings in 2006 isn't clear right now, according to chief financial officer David Newman.

"We may need to spend a little more money to see what's going on out there in terms of programs," Newman said in the conference call.

Plug Power, based in Latham, N.Y., develops and commercializes fuel cell systems used in sectors like telecommunications, utilities and power supply.

NovaDel's $11.73 million offering

Moving to the biotech sector, NovaDel Pharma, Inc. intends to settle an $11,734,554 by the end of this week.

The company plans to sell 8,092,796 shares at $1.45 each to a group of accredited investors, who will also receive warrants for 2,427,839 shares.

The warrants are exercisable at $1.60 each.

The deal is scheduled to close on Thursday.

When the placement was announced Tuesday afternoon, the stock edged up 4 cents, or 2.53%, to settle at $1.62 (AMEX: NVD).

In May 2005, NovaDel issued 6.7 million shares at $1.05 each in another PIPE. The investors in that deal included ProQuest Investments and Caisse de depot et placement du Quebec and Paramount BioCapital, Inc. was the placement agent.

Based in Flemington, N.J., NovaDel is a pharmaceutical company that produces oral sprays and gelatin capsules.

Tiomin's C$7.43 million deal

Up in Canada, Tiomin Resources Inc. is gearing up to settle a C$7,434,000 unit deal with Jinchuan Group Ltd.

Jinchuan intends to buy 16.52 million units at C$0.45 each.

The units consist of one share and one half-share warrant. Each whole warrant is exercisable at C$0.55 for 15 months.

If Tiomin completes an equity offering before Dec. 31, 2006 at a price less than C$0.45 each, Jinchuan will receive another half-share warrant per unit purchased.

Once the deal closes, Jinchuan will hold 9.9% of Tiomin's outstanding common stock.

Also, Jinchuan agreed to provide subsidiary Tiomin Kenya Ltd. with a $35 million convertible subordinated debt facility. The facility is convertible into common stock at C$0.65 each. The full terms of the facility are still being determined.

The transactions will require the approval of the company's shareholders. The next shareholders' meeting is scheduled for June 14.

Proceeds will be used for working capital and for exploration on the company's Kwale project.

"We are very pleased to have Jinchuan as a customer and an equity investors and believe that both companies will mutually benefit from the partnership," said Jean-Charles Potvin, Tiomin's CEO, in a statement.

"Our investment in Tiomin is consistent with our strategy of diversifying our product base and securing access to raw materials internationally," said Jinchuan's CEO Li Yong-jun, in a news release. "We are very pleased to be in a partnership with Tiomin and look forward to a long and mutually beneficial association."

The stock gained a penny and a half on Tuesday to end at C$0.40 (Toronto: TIO).

Toronto-based Tiomin is a mineral exploration company.

Another mineral explorer, Scandinavian Minerals Ltd., priced a C$5.33 million offering of 1.3 million shares on Tuesday.

The shares are priced at C$4.10 each, a 6.8% discount to the company's C$4.40 closing stock price on April 10.

Paradigm Capital Inc. is the underwriter.

The stock gained 9.9%, or 40 cents, Tuesday to close at C$4.80 (Toronto: SGL).

The placement is scheduled to close April 26.

Proceeds will be used for exploration on the company's Keivitsa nickel-copper-platinum group elements project in Finland, as well as for general corporate purposes.

Headquartered in Toronto, Scandinavian Minerals is a mineral exploration company focused on precious and base metals.

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