Kennedy-Wilson closes $32.55 million; Liberty Energy secures equity line; Axiologix plans deal

By Devika Patel

Knoxville, Tenn., Aug. 16 - Monday's strongest private placements were from domestic companies, with issuers heralding two large equity lines, a preferred stock sale and a promissory note financing.

Kennedy-Wilson Holdings, Inc. announced it completed a $32.55 million private placement of preferred stock with investor Fairfax Financial Holdings Ltd. Fairfax and the company announced a strategic partnership in May, shortly after the investor purchased $100 million of the company's convertible preferreds on May 18.

Liberty Energy Corp. arranged an $8 million line of credit with Asia-Pacific Capital Ltd. under which the investor will buy company units over four years. Company shares (OTCBB: LBYE) jumped 107.55% after Monday's announcement, closing at $0.55.

Software and services provider Axiologix Education Corp. also announced a line of credit on Friday, under which it will raise $5 million over three years by selling common shares to Dutchess Opportunity Fund, II, LP. The company needs the funds for its planned development and growth.

And ARYx Therapeutics, Inc. arranged a $4 million private placement of promissory notes with affiliates of MPM Capital and Ayer Capital Management, LP on Friday, raising proceeds for debt repayment and working capital, which will enable the company to continue operating.

Kennedy-Wilson wraps $32.55 million

Beverly Hills, Calif.-based real estate services and investment firm Kennedy-Wilson said it concluded a $32.55 million series B preferred stock sale with Fairfax Financial. The investor bought 32,550 preferreds, which are convertible into about 3 million common shares.

"We are very pleased about Fairfax's continued investment in Kennedy Wilson," Kennedy Wilson's chairman and chief executive officer William McMorrow said in a press release. "The company continues to build and maintain relationships with some of the world's top companies and pursue strategic real estate investments together."

The proceeds from the offering were used to repurchase the company's 7% convertible subordinated debt. The preferreds sold in the placement are convertible into approximately 3 million common shares, the same number of shares into which the retired 7% convertible debt was convertible.

In May, the company and investor announced that they were forming a new partnership to pursue commercial real estate asset acquisitions, including purchasing loans and real property. Fairfax is providing the company with up to $250 million in capital as part of this commitment.

"We are extremely pleased about working with Fairfax on both the corporate level and deal level," McMorrow stated at the time. "Fairfax is such a well respected company with an extraordinary reputation worldwide."

The company's share price (NYSE: KW) rose 0.31%, or 3 cents, closing at $9.78 on Monday.

Liberty gets $8 million

Liberty Energy, an oil and gas explorer based in Selby, England, negotiated an $8 million four-year line of credit with Asia-Pacific.

"This financing agreement has come at the perfect time, both in terms of the company and the market," chief executive officer Ian Spowart said in a press release.

"This funding will now allow Liberty to take advantage of these market conditions that we believe have opened up interesting domestic onshore opportunities to increase shareholder value," Spowart said.

"We are extremely pleased to have secured a non-toxic equity investment that does not include any debt financing," chief financial officer Daniel Martinez-Atkinson said in the release.

"We are very fortunate not to have any debt obligations or debt financing. This capital will not only enable us to continue our existing operational activities but will provide us with sufficient capital for our long term needs allowing us to strategically move ahead and take Liberty to the next level," Martinez-Atkinson said.

The company will sell up to $8 million of its units of one common share and one and one half-share warrant to Asia-Pacific at a price equal to the higher of $0.50 or 90% of the volume-weighted average of the closing price of common stock for the five days immediately preceding the date of the drawdown notice.

The whole warrants will be exercisable at 125% of the unit price for three years.

The placement was arranged to help further the company's expansion and growth plan. Proceeds will be used primarily for drilling, development and other operating expenses.

An initial drawdown of the funds has already been received by the company. These funds will be used to begin on work-overs of existing wells that are expected to be completed as early as September.

AxioLogix plans $5 million

On Friday, AxioLogix agreed to sell $5 million of its shares to Dutchess Opportunity Fund at 95% of the lowest daily volume-weighted average price during a five-trading-day pricing period.

"We are pleased to be working with Dutchess Capital at such an exciting time in the company's history," chief executive John Daglis stated. "We believe there is a significant growth opportunity in the educational software market, and we expect that this financing commitment will help accelerate our development and growth."

Each drawdown is limited to 200% of the average daily volume of its common stock in the U.S. market for three trading days prior to the date of delivery, with a cap of $500,000.

The Egg Harbor Township, N.J., company's shares (OTCBB: AXLX) were unchanged on Monday, closing at $0.55.

ARYx heralds $4 million

ARYx reported that it sold $2 million of its 12% secured promissory notes on Aug. 13, as part of a $4 million private placement with affiliates of MPM Capital and Ayer Capital. ARYx believes the anticipated proceeds from this financing should allow the company to operate through the end of 2010.

"The securing of this bridge financing is significant to ARYx since it now gives us the time to complete a strategic transaction that, if finalized, could realize real value from our product portfolio," ARYx chairman and chief executive officer Paul Goddard stated.

The notes are due Jan. 1, 2013 and were accompanied by warrants for 1 million common shares, which are exercisable at $0.50 for five years. Investors will receive warrants for an additional 1 million common shares in a second tranche, expected to settle by Sept. 15.

Proceeds will be used for debt repayment, working capital and other corporate and operational purposes.

The biopharmaceutical company is based in Fremont, Calif. Its shares (Nasdaq: ARYX) dropped 6.09% on Monday, or 2.8 cents, closing at $0.432.

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