Charys stock climbs on $13 million PIPE; PGM raises C$25 million from convertibles

By Sheri Kasprzak

New York, May 23 - Even though Canadian PIPE activity picked up again after Victoria Day, volume in general took a hit as stocks fell and oil prices climbed.

As hurricane season nears, oil prices jumped $1.80 to end the day at $71.76 per barrel, sending the major stock indexes, which had made gains earlier in the session, down.

The Dow Jones Industrial Average fell 26.98 to close at 11,098.35; the Nasdaq composite index slipped 14.09 to end at 2,158.76; and the Standard & Poor's 500 composite index lost 5.50 to settle at 1,256.57.

"It's good news for energy stocks, I guess," said one sellside market source of the climb in oil prices Tuesday. "The broader market is getting hit pretty hard. Over the summer, [oil] prices are probably going to keep going up and I think that means some significant dips in stocks."

Moving to specific offerings on Tuesday, Charys Holding Co. saw its stock jump 11.11% after announcing the terms of a $13 million private placement of series D convertible preferreds.

The stock gained 70 cents to close at $7.00 (OTCBB: CHYS).

The preferreds, convertible into 4,333,333 common shares at $3.00 each, were issued to replace the company's existing convertible facility. The investors received warrants for 4,333,333 shares, exercisable at $6.24 each. Gunn Allen Financial was the placement agent.

Separately, Charys plans to redeem $4 million in outstanding 8% secured convertible debentures. The company has so far redeemed the principal and interest on the debentures due through May 19.

The debentures are held by Highgate House Fund, Ltd. and were originally issued on Nov. 17, 2005. The debentures had been convertible into a total of 4 million common shares.

Looking to the company's latest earnings statement, the company reported a net income of $364,896 for the quarter ended Jan. 31, 2006, compared with a net loss of $821,891 for the same quarter of 2005.

"In spite of its successful refinancing and partial retirement of the debt assumed in its acquisition of CCI [Telecom, Inc.], at present the company has a $21 million working capital deficit," said the company's earnings statement.

"Although the company has available $7 million in asset-based credit facilities and has secured other sources of short-term borrowing and equity financing, its borrowing capacity under the credit facilities is limited to the extent of the qualified accounts receivable of two of the company's operating subsidiaries and the additional financing obtained is insufficient to meet its working capital needs over the near-term."

Atlanta-based Charys acquires companies in the integrated infrastructure services market.

PGM's C$25 million deal

In Canada, PGM Ventures Corp. kicked off the week for Canadian PIPEs as the market got back to business after Victoria Day.

The mineral explorer has secured C$25 million from convertible debentures from Dundee Resources Ltd.

Dundee intends to buy the 6% debentures, which are convertible into units at C$1.25 each. The debentures are due in three years. The units consist of one share and one half-share warrant. Each whole warrant is exercisable at C$2.00 for two years.

Completion of the debenture deal is contingent upon PGM closing a C$15 million equity financing of 15 million shares.

At the end of the day, the company's stock dropped 3 cents, or 2.65%, to close at C$1.10 (TSX Venture: PPG).

The debenture deal is scheduled to close June 30.

PGM is based in Toronto.

Caribou plans C$8 million PIPE

In other Canadian activity, oil explorer Caribou Resources Corp. priced an C$8 million offering of flow-through and non flow-through shares.

The company intends to sell 1,304,348 common shares at C$2.30 each and 1,639,345 flow-through shares at C$3.05 each.

A syndicate of underwriters led by Acumen Capital Partners Ltd. has a greenshoe for up to C$2 million. For every C$5.00 in flow-through shares placed in the over-allotment option, C$3.00 in non flow-through shares must be placed.

Caribou expects the deal to settle on June 6.

On Tuesday, the stock dipped a penny to close at C$2.35 (TSX Venture: CBU).

Proceeds will be used for debt reduction, as well as exploration and development.

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

In the gold sector, Consolidated Gold Win Ventures Inc. settled a C$1.5 million private placement of 13,313,400 non flow-through units at C$0.10 and 1,405,500 flow-through units at C$0.12 each.

The non flow-through units consist of one share and one warrant. Each warrant is exercisable at C$0.12 for two years.

The flow-through units are comprised of one share and one warrant with each warrant exercisable at C$0.18 for two years.

Northern Securities Inc. was the lead agent for the deal.

After the deal was announced Tuesday afternoon, Consolidated Gold Win's stock gained a penny to end the session at C$0.175 (TSX Venture: CGW).

The proceeds from the offering will be used for exploration on the company's Drybones #4 mineral project in the Northwest Territories, the Dolly Varden mineral project in Nevada and for general corporate purposes.

Located in Vancouver, B.C., Consolidated is a gold and mineral exploration company.

Vistula stock falls

Vistula Communications Services, Inc.'s stock took a hit on Tuesday, a day after announcing that it intends to settle a $16.5 million PIPE.

The stock sank 18.55%, or 23 cents, to close out at $1.01 (OTCBB: VSTL).

On Monday, when the deal was announced, the stock closed unchanged at $1.24.

In the placement, the company intends to sell shares to a group of institutional investors at $1.00 apiece.

One market source said on Monday that the company took a hit in its earnings and may be struggling financially. The earnings report was released on Monday, showing a net loss of $4,187,777 for the quarter ended March 31, compared with a net loss of $1,410,919 for the same quarter of 2005.

New York-based Vistula provides voice-over-internet protocol services to communications companies.

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