Sirva secures $75 million from private placement of convertibles; Moscow CableCom raises $21.6 million

By Sheri Kasprzak

New York, Sept. 25 - As stocks rebounded, private placement volume got a shot in the arm on Monday and it may be a sign of things to come.

"The past few months have been the exception to the rule," said one sellsider on Monday when asked about volume. "The end of this year will be when things start picking up."

One market source based in Toronto said even though volume north of the border has remained rather light for the past few months, volume may pick up from companies selling flow-through shares.

"Everyone's out for the tax break and they'll be getting those out before the end of the year," he said. "The time is growing pretty close for the flow-through deals to get priced and done before year-end."

In the broader market, stocks climbed in spite of a jump in oil prices late in the session. Oil prices had dropped below $60 per barrel early in the session only to gain 90 cents to close at $61.45 per barrel.

The Dow Jones Industrial Average gained 67.71 to close at 11,575.81; the Nasdaq composite index climbed by 30.14 to end at 2,249.07; and the Standard & Poor's 500 composite index closed up 11.59 to settle at 1,326.37.

Sirva raises $75 million

Moving to particular offerings, Sirva, Inc. said it is gearing up to settle a private placement of subordinated convertible notes for $75 million later this week.

"It's obviously been good for them," said one market source when asked about the notes. "The stock seems to be climbing on the news. The conversion price [of the preferreds] is nice and solid compared to market. Not too shabby, if you ask me. I don't know a great deal about the company, but the terms look good."

According to the terms, the 10% notes were purchased by ValueAct Capital and MLF Investments, LLC and are convertible into 75,000 shares of 8% convertible perpetual preferred stock. The maturity of the notes could not be determined Monday.

The preferreds are convertible into 25 million common shares at $3.00 each, a 20% premium to the company's $2.50 closing stock price on Sept. 22.

The offering is slated to close on Sept. 29.

Proceeds will mostly be used to repay existing debt. The remainder will be used for general corporate purposes.

By the end of the day, the stock ended up 15 cents, or 6%, to close at $2.65 (NYSE: SIR). The stock began making gains early in the session, climbing by 12.42%, or 31 cents, at 10 a.m. ET.

Volume took off with 2,169,600 shares traded compared to the average 690,683 shares.

"In reviewing our strategic objective, we evaluated current market trends, our working capital needs and growth opportunities," said Brian Kelley, the company's chief executive officer, in a statement.

"We determined that a transaction of this nature and size with investors that understand our business and appreciate our long-term strategy gives us the financial flexibility we need to execute our business plan going forward."

Chicago-based Sirva provides relocation services for residential clients.

Moscow CableCom's PIPE

Elsewhere Monday, Moscow CableCom Corp. concluded a private placement for $21,620,299 to help fund future growth.

A group of investors led by Renova Media Enterprises Ltd. bought 2,341,760 units at $9.2325 each. Renova will buy 92.5% of the offering, or 2,166,260 units.

The units are comprised of one share and one half-share warrant. The whole warrants are exercisable at $11.004 each through Sept. 21, 2008.

The unit price was based on the company's closing bid price on Sept. 20, which was $9.17, plus $0.0625 for each half-warrant.

After the offering was announced Monday afternoon, the stock gave up 10 cents, or 1.09%, to end at $9.05 (Nasdaq: MOCC).

"The funds we will receive from this private placement allow us to continue the pace of our homes-passed network expansion and support the activities that have resulted in the strong subscriber growth reported through August," said Mikhail Smirnov, the company's CEO, in a news release.

"Further, we expect subscriber growth to continue to accelerate now that seasonally slow summer months have passed."

New York-based Moscow CableCom provides access to pay-television and internet services in Russia.

Simtek's stock drops

Looking to secondary market activity, Simtek Corp. watched its stock slip by more than 4% on Monday after concluding a $4,555,000 offering late last week.

The stock slipped by 4.35%, or 2 cents, to close at $0.44 (OTCBB: SRAM). On Friday, when the deal settled, the stock closed unchanged at $0.46.

In the placement, Renn Capital, Crestview Capital Master LLC, Big Bend XXVII Investments LP, Straus Partners & Straus GEPT and SF Capital, as well as insiders of the company, bought shares at $0.395 each.

Proceeds will be used for the purchase of silicon wafers to support revenue growth and for working capital.

The company also announced Friday that it intends to conduct a reverse stock split in September or October.

Based in Colorado Springs, Simtek designs semiconductor memory products used in global positioning systems, robotics, copiers, printers and other electronics.

In other secondary tech news, Verso Technologies, Inc.'s stock edged up Monday after closing a $14 million revolving credit facility from Laurus Master Fund, Ltd. with warrants.

The stock climbed by 2 cents, or 2.34%, on the day to end at $0.92 (Nasdaq: VRSO). The stock fell by 3.97 cents, or 3.95%, on Friday when the deal was sealed to end at $0.899.

The three-year facility includes an $8 million tranche and a $6 million tranche, of which $4 million is available now and the rest when Verso generates EBITDA of more than $500,000 in one fiscal quarter.

The new facility replaces the company's current $10 million credit facility with Silicon Valley Bank.

The investor will receive warrants for 600,000 shares, exercisable at $0.01 each for five years and warrants for 1,321,877 shares, exercisable at $0.91 each for five years.

The offering also includes warrants for 660,939 shares, exercisable for five years at $0.91 each.

Verso, based in Atlanta, is a communications company for carriers and service providers.

© 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.