Gran Tierra raises $65 million in unit sale; China Unicom raises $1 billion in convertibles issue

By Sheri Kasprzak

New York, June 21 - Gran Tierra Energy, Inc. headed up PIPE activity, selling $65,004,076 in units at a discount of more than 53% to market.

The deal sent the company's stock down 24 cents, or 7.5%, to settle at $2.96 (OTCBB: GTRE).

"Wow," said one sellside market source based in Vancouver, B.C. "That is one enormous discount. They look kind of troubled from what I've seen. I don't know too much about them but from their earnings, they look like they've fallen on some rough patches."

According to the company's earnings, Gran Tierra's net losses skyrocketed to $1.22 million for the quarter ended March 31 from a net loss of $496 for the same quarter of 2005.

"The company's ability to continue as a going concern is dependent upon obtaining the necessary financing to acquire oil and natural gas interests and generate profitable operations for its oil and natural gas interests in the future," said the earnings statement.

"The company's financial statements as at and for the period ended March 31, 2006 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business."

"The company expects to incur substantial expenditures to further its capital investments programs and the company's cash flow from operating activities may not be sufficient to satisfy its current obligations and meet its capital investment program," the earnings report continued.

Under the terms of the placement, Gran Tierra sold 43,336,051 units at $1.50 each.

The units are comprised of one share and one half-share warrant. The full warrants are exercisable at $1.75 each through June 20, 2011.

Deutsche Bank Securities Inc. and Sanders Morris Harris were placement agents for the deal, the proceeds of which will be used to settle Gran Tierra' acquisition of Argosy Energy International and of the El Vinalar Block in Argentina from Golden Oil Corp.

"Gran Tierra is, today, entering a new chapter in its history," said Dana Coffield, the company's chief, in a statement. "We have concluded two important transactions and are ready for a third. We have resources in place for an aggressive work program. We are positioned for growth in three countries. We have achieved our objectives for our first year as a company, and we are ready for the challenges and rewards that are ahead."

Gran Tierra is a Calgary, Alta.-based oil and natural gas exploration company.

In the broader energy sector, oil prices climbed 99 cents to end the session at $70.33 per barrel.

China Unicom's $1 billion offering

Looking internationally, Hong Kong's China Unicom Ltd. settled a $1 billion private placement of convertible bonds with SK Telecom Co. Ltd.

SK Telecom bought zero-coupon bonds, which are due in 2009 and are convertible into a total of 899,745,075 common shares at HK$8.63 each.

Proceeds will be used for general corporate purposes and for working capital.

The offering was conducted as part of a strategic alliance between China International Capital Corp., China Unicom's parent, and SK Telecom to develop China International Capital's code division multiple access cellular communications business in mainland China.

The company's stock remained unchanged on Wednesday at HK$6.85 (Hong Kong: 762).

China Unicom, based in Hong Kong, is a telecommunications service provider.

C1 Energy's C$8 million PIPE

Heading back to the energy sector, C1 Energy Ltd. priced and then increased the size of a private placement for C$8,001,000.

The upsized deal includes 4,572,000 flow-through shares at C$1.75 each.

The deal is being placed through a syndicate of underwriters led by GMP Securities LP.

The offering priced Wednesday morning as a C$4,000,150 offering of 2,285,800 shares.

The placement is scheduled to close July 12.

Proceeds will be used for Canadian exploration expenses.

The company's stock fell 5 cents, or 3.33%, to close at C$1.45 (Toronto: CTT).

Calgary-based C1 is an oil and natural gas exploration company.

In other Canadian resources activity, GlobeStar Mining Corp. priced a private placement for up to C$25 million.

The offering includes up to 21,739,131 special warrants at C$1.15 apiece. The special warrants are exchangeable on a one-for-one basis for common stock once a prospectus covering the underlying shares is effective.

A syndicate of underwriters led by Jennings Capital Inc. has a greenshoe for up to 4,347,827 additional special warrants.

The proceeds will be used to finance the purchase of the Cerro de Maimon copper project. The rest will be used for exploration and working capital.

The stock edged down a penny to close at C$1.20 (TSX Venture: GMI).

Based in Toronto, GlobeStar is a mineral exploration company.

Sierra Vista stock loses 17.8%

Oil explorer Sierra Vista Energy Ltd.'s stock dove by 17.86% a day after the company priced a C$10,000,235 private placement.

The company's stock fell 25 cents to close at C$1.15 (TSX Venture: SVR).

In the placement, Sierra Vista plans to sell class A shares at C$1.15 each and flow-through shares at C$1.45 each.

The offering is being placed through a syndicate of underwriters led by Dundee Securities Corp. and is scheduled to close July 6.

Proceeds from the flow-through shares will be used for ongoing exploration on the company's Canadian properties, and the proceeds from the common shares will be used for general corporate purposes.

Sierra Vista is based in Calgary, Alta.

Corgentech stock dips again

In the biotech sector, Corgentech Inc.'s stock dipped for the second straight session after the company closed a $30 million equity line agreement with Azimuth Opportunity Ltd.

The stock fell 15 cents, or 1.87%, to close at $7.87 (Nasdaq: CGTK).

When the deal closed on Tuesday, the stock fell 2.67%, or 22 cents, to end at $8.02.

Under the terms of the two-year equity line, Azimuth agreed to buy shares at a discount of 6% to 7% to the volume weighted average price over the 10 trading days after notice of a draw.

Proceeds will be used for the company's clinical development activities, for working capital and for general corporate purposes.

Corgentech, based in South San Francisco, Calif., is a biopharmaceutical company focused on therapeutic treatments for pain.

On Wednesday, Corgentech announced it has changed its name to Anesiva Inc., effective immediately, and will be listed on Nasdaq under the symbol ANSV.

© 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.