Benchmark eyes investors, expansion; Global BPO lands strategic investor; Erdene, Orex plan placements

By Kenneth Lim

Boston, June 2 - Benchmark Energy Corp. said its C$4 million units placement helped to strengthen its relationship with a key partner and could aid its growth in Colombia.

Global BPO Services Corp. announced a strategic $150 million investment by Ares Corporate Opportunities Fund that will be used to fund a tender offer.

Erdene Resource Development Corp. announced a C$15 million offering of common stock, while Orex Minerals Inc. said it is selling C$5.3 million worth of units in a private placement.

Benchmark eyes Colombia growth

Benchmark Energy said its C$4 million non-brokered private placement of units was initiated in response to interested shareholders of a key partner.

The company said a week ago that it is selling up to 10 million units at C$0.40 per share. Each unit comprises one common share and one half-share warrant. Each whole warrant is exercisable at C$0.65 for one year.

Benchmark common stock (TSX: BEE) closed unchanged at C$0.36 on Monday.

Benchmark, a Calgary, Alta.-based oil and gas exploration and development company, said it will use the proceeds to fund its obligations under an agreement with Infinity Oil Ltd. and for working capital. The agreement with Infinity will allow Benchmark to take a 35% participating interest in the Buena Vista block in Colombia.

Existing shareholders of Infinity are expected to subscribe for at least C$1.5 million of the offering, while insiders of Benchmark plan to buy up to 25% of the offering, Benchmark said in a news release.

"We recently sold our Tunisian assets ... so frankly we didn't need any new capital," Benchmark president and chief executive David R. Robinson told Prospect News. "We entered into an agreement with Infinity Oil, and some of the investors of Infinity Oil and some insiders expressed an interest in investing in the company. The balance of the placement, we thought that it was only fair to offer it to existing shareholders as well. We didn't necessarily need to do this private placement."

The Tunisian deal and the current stock placement are expected to yield about C$9 million in proceeds for Benchmark. The company plans to use that money to fulfill its Buena Vista obligations and to seek more opportunities in Colombia.

"Now we have roughly C$9 million to do one and potentially two more deals in Colombia with all the capital that we have," Robinson said.

The cash should be able to last the company until October or November of this year, he added.

"Assuming we do the two other projects that we're looking at ... we should be able to last to October or November without raising any more capital," Robinson said. "At that time we'll look at our cash flow going forward. We do expect to be generating good cash flow from the Buena Vista block by October or November."

Robinson said he was satisfied with the pricing of the placement.

"Our share price was slightly above C$0.40 at the time we announced it, and the placement hasn't closed yet, so I don't know how it will turn out," he said. "Of course we'd always like to see our share price higher, but we were satisfied."

Global BPO to sell preferreds

Global BPO said it is selling $150 million of convertible preferred stock in a private placement to a strategic investor.

Global BPO is selling 150,000 3% preferreds at $1,000 per share to Ares Corporate Opportunities Fund II, LP.

The preferreds are initially convertible into common shares at $8.00 per share. The preferreds are subject to forced conversion after two years, at the company's option, if the company's stock trades higher than $12.00 per share for at least 20 trading days out of 30 consecutive trading days.

Global BPO common stock (Amex: OOO) gained 0.14%, or $0.01, to close at $7.35 on Monday.

Ares also bought 7.5 million warrants at $0.001 per warrant, or $7,500 total, from the founders of Global BPO. Ares will also have the right, following the deal, to appoint up to three members to Global BPO's board.

Global BPO, a Boston-based special-purpose company created to acquire a business process outsourcing firm, said it will use the proceeds to fund a tender offer for up to about 20.6 million of its outstanding common shares at $8.00 per share.

The investment by Ares comes as Global BPO is trying to complete its acquisition of Stream Holdings Corp., a company that focuses on providing customer relationship management and other business process services to Fortune 1000 companies. Global BPO said the purchase price of the acquisition has been reduced to $200 million from $225.8 million.

"We are excited to partner with Ares to complete our proposed acquisition of Stream," Global BPO chairman and chief executive Scott Murray said in a statement. "Ares is a terrific strategic investor for us in this transaction. They have a deep understanding of both the services industry and capital markets."

"The combination of the tender offer and the reduction in the Stream purchase price provides both an attractive value proposition and liquidity option for our stockholders," Murray also stated. "We believe that for those wishing to tender, our proposal offers a cash value in excess of the liquidation value of the trust fund, and for those wishing to hold their shares, Global BPO represents an excellent opportunity for those stockholders to partner with a proven executive team [and] build on the strong momentum in the Stream business."

Ares senior partner David Kaplan said in the same statemen,: "We are excited to have the opportunity to partner with Scott and his team to build on the growth and earnings potential that has already been created at Stream. We believe that Scott's vision to create an integrated BPO company will offer international corporations the opportunity to select a world-class provider of BPO Services across many unique corporate functions using common technology architecture. Ares knows Stream and Scott Murray well, as our firm was an investor in its mezzanine debt securities when the company was led by Scott."

Erdene to raise C$15 million

Erdene Resource said it plans to sell C$15 million of its common stock in a private placement.

The deal involves 15 million shares at C$1.00 per share. Erdene common stock (TSX: ERD) closed at C$0.98 on Monday, flat compared to its previous close.

The lead agents for the deal are Toll Cross Securities Inc. and National Bank Financial Inc. There is an over-allotment option for a further C$5 million, or 5 million shares.

Erdene, a Dartmouth, N.S.-based resource exploration company formerly called Erdene Gold Inc., said it will use the proceeds for exploration and development activities and for general corporate purposes.

Orex to sell units

Orex Minerals said it plans to raise C$5.3 million through a private deal.

The company is selling up to about 17.7 million units at C$0.30 apiece. Each unit comprises one common share and one half-share warrant. Each whole warrant is exercisable at C$0.40 for two years.

There is an over-allotment option for C$1.06 million, or about 3.5 million units. PI Financial Corp. and Haywood Securities Inc. are the lead agents.

Orex, a junior mineral exploration company based in Vancouver, B.C., said it will use the proceeds to further explore and develop its Santa Cruz property in Mexico and for general working purposes.

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