Cell Therapeutics to seal $40 million direct stock sale; Petra Diamonds pockets $20 million from bonds

By Sheri Kasprzak

New York, Sept. 19 - Cell Therapeutics, Inc. led PIPE news for the second straight session, this time announcing the pending completion of a $40 million registered direct placement.

The news comes just a day after the company announced its plans to sell $15 million in stock to Novartis Pharma AG.

In the direct offering, the company intends to sell 23,121,387 shares at $1.73 each, and the investors have the option buy another 5,780,346 shares within 90 days of closing.

Cell Therapeutics chief executive officer James Bianco did not return calls for comment on either the direct placement or the Novartis offering by press time Tuesday.

After the offering was announced in the morning, the stock slipped by 15.87%, or 33 cents, to end the session at $1.75 (Nasdaq: CTIC). The stock lost another penny in after-hours trading.

Volume of the shares traded remained substantially elevated with 30,461,440 shares traded, compared with the average 1,198,410 shares.

The deal is set to settle on Sept. 21.

The shares are being sold under the company's shelf registration.

Rodman & Renshaw, LLC is the lead agent for the deal.

The deal comes on the heels of Cell Therapeutics' announcement that it will close a $15 million stock deal with Novartis Pharma as part of their license and co-development agreement to develop and commercialize Xyotax for lung cancer.

In that deal, Novartis agreed to buy 8,670,520 shares at $1.73 each. On Monday, after the Novartis offering was announced, the stock climbed by 13 cents, or 6.67%, to end at $2.08, losing 2 cents in after-hours activity. Volume of the shares traded Monday was 23,843,767 shares, compared to the average 847,091.

Cell Therapeutics, based in Seattle, develops treatments for cancer.

Petra raises $20 million

Internationally, Petra Diamonds Ltd. wrapped up a $20 million private placement of a zero-coupon convertible bond.

The bond purchased by Al Rajhi Holdings WLL is due Sept. 18, 2009 and is convertible into common shares at 130p each, a 24.2% premium to the 30-day average share price.

Al Rajhi also received warrants for 2 million shares, exercisable at 130p each through Sept. 18, 2009.

"This convertible bond financing gives Petra the ability to actively consider revenue and production growth opportunities that have the potential to fast-track Petra's development and further entrench the company as a true mid-tier diamond producer," said Adonis Pouroulis, the company's chairman, in a news release.

"This financing will also serve to underpin our treasury should we decide to expand our exploration interests and exercise our warrants as part of the Xceldiam cooperation agreement. We are confident that the growing relationship with Al Rajhi will only assist in Petra achieving its long-term objectives."

The company's stock edged up by 1.4%, or 1.50p, to close at 109.50p Tuesday (London: PDL).

Proceeds from the deal will be used for the acquisition or investment in diamond mines, the acquisition of another diamond-related business, the exercise of warrants for shares of Frannor Investment and Finance Ltd. and for general corporate purposes.

Petra Diamonds, located in St. Helier, U.K., is a diamond exploration and acquisition company.

North American's $5.5 million PIPE

Elsewhere in private placement activity, North American Technologies Group, Inc. sealed a $5.5 million private placement, selling 18,644,068 shares.

The shares were sold at $0.295 each to Herakles Investments, Inc.; Crestview Capital Master, LLC; Midsummer Investment Ltd.; Islandia, LP; Enable Growth Partners LP; Enable Opportunity Partners LP; and Pierce Diversified Strategy Master Fund LLC.

"NATK investors recognize that the market for high-performance, long-lasting, environmentally responsible, engineered structural products is a strong opportunity," said the company's CEO, Neal Kaufman, in a statement. "The company has demonstrated it has the commitment to product excellence, financial controls and customer success necessary to be the leader in this market."

The investors received warrants for 9,322,034 shares, exercisable at $0.36 each for 54 months.

The company used $1 million of the proceeds to repay a bridge note to Herakles Investments. The note had been due Oct. 15, 2006. The remainder of the proceeds will be used for working capital.

North American, based in Marshall, Texas, manufactures railroad crossties.

Storm Cat's C$23.11 million deal

Moving to the oil sector, Storm Cat Energy Corp. announced its plans to settle a C$23,111,110 private placement with a single investment group based in Ontario. The offering comes even as oil prices dropped to a six-month low, losing $2.14 to end at $61.66 per barrel.

"It's getting to the point where investors are probably going to start looking at these things based on a company-to-company basis as opposed to the sector as a whole," said one sellside market source based in Vancouver, B.C. "Some of these [oil deals] are pricing pretty well, so that leads me to believe it has more to do with issuer performance than the sector as a whole."

The Storm Cat offering includes 7,594,937 units at C$1.58 each and 6,172,839 flow-through shares at C$1.80 each.

The units consist of one share and one warrant for 0.28 of a share. The whole warrants are exercisable at C$1.90 each for 18 months.

Proceeds from the units will be used to pay down mezzanine debt incurred with an acquisition in the Powder River Basin as well as to fund exploration and development. The proceeds from the flow-through shares will be used for Canadian exploration expenses.

The company's stock fell by 4 cents, or 2.56%, to close at C$1.52 Tuesday (Toronto: SME).

Storm Cat, based in Calgary, Alta., is an oil and natural gas exploration company.

In other energy news, Madalena Ventures Inc. priced a C$22 million private placement.

The offering includes up to 27.5 million units at C$0.80 each.

The units are comprised of one share and one half-share warrant. Each whole warrant is exercisable at C$0.90 for one year.

Placement agent Canaccord Capital Corp. has a greenshoe for up to 2.75 million additional units.

The deal is scheduled to close Oct. 12.

The stock slipped by 2 cents Tuesday to end the session at C$0.83 (CNQ: MAVI).

Proceeds will be used for ongoing oil and gas acquisition, exploration and development projects.

Calgary, Alta.-based Madalena is an oil and natural gas exploration and development company.

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