Clearwire to get funds from Sprint, Comcast; Afren raises £104 million; HealthSport wraps deal

By Stephanie N. Rotondo

Portland, Ore., Nov. 10 - Clearwire Corp. was the nom du jour in the private placement market, as the company announced a $1.56 billion financing agreement.

The agreement was with six investors, including Sprint Nextel Corp. and Comcast Corp. The company intends to use proceeds to fund the expansion of its nationwide 4G network.

Meanwhile, Afren plc said it took in more than £104 million from a private placement of stock.

In other completed deals, HealthSport Inc. raised $10 million from a single investor. The company will use the funds to help it break into the pharmaceutical arena.

Midlands Minerals Corp.'s top executive said that the time was right for the company to do a financing, as it settled the first tranche of a previously announced placement of C$6 million of units. The company raised more than 50% of the funds in the first closing.

After taking in nearly C$3 million in a private placement of units, Blackbird Investments Inc. was able to make the conversion from a capital pool company to an oil and gas company, according to the company's chief executive officer. The funds will be used to purchase an interest in a Texas oil field.

Clearwire to get funding

Clearwire announced it had negotiated a $1.56 billion private placement of interests with six investors - including Sprint Nextel Corp. and Comcast Corp. - in an effort to fund its expansion of the its 4G network.

Under the terms of the deal, Sprint will invest $1.176 billion, receiving 160.4 million of class B non-voting common interests and an equal number of voting interests. Comcast would meanwhile invest $196 million for 26.7 million each of the non-voting and voting interests.

Among other investors, Time Warner Cable Inc. will put up $103 million to buy 14.1 million of both the non-voting and voting interests. Bright House Networks LLC will invest $19 million for 2.6 million of each interest type. Intel Corp. will provide $50 million for 6.8 million each of the interests and Eagle River Holdings LLC will invest $20 million for 2.7 million of each interest.

The shares will be sold at $7.33 per share, according to a press release.

"This additional level of strategic funding marks another important milestone in the progress of Clearwire, and will enable us to maintain our leadership and aggressive 4G WiMAX network build plans," said Bill Morrow, chief executive officer, in the release. "Today's news is also further validation of the importance of our 4G network to our strategic investors. We all benefit from this robust, all-IP, high-bandwidth network that delivers an unmatched combination of Internet speed and mobility.

"While we are very pleased to have every one of our investors, we are particularly pleased and honored that Sprint Nextel, Comcast, Time Warner Cable, Intel, Eagle River and Bright House Networks have decided to provide this additional round of strategic financing," Morrow added. "Together, we share a common vision of providing consumers and businesses with a new category of Internet service capable of meeting the growing demand for mobile data."

The deal is expected to close in the fourth quarter.

In addition to the private placement, Clearwire has plans to issue a minimum of $1.45 billion in new senior secured notes. The proceeds will be used to repay the company's existing $1.40 billion credit facility.

Also, Sprint and Comcast have agreed to replace their debt holdings with the notes, resulting in an additional $240 million, should the original notes offering be fully subscribed.

Stockholders are also getting a chance to participate in new financings, as Clearwire is also planning a rights offering for existing shareholders. Under the terms of the rights offering, class A shareholders can purchase rights equal to 0.4336 common shares. The rights are exercisable at $7.33 per share.

Clearwire's equity (Nasdaq: CLWR) gained 38 cents, or 5.59%, to $7.18. Market capitalization is $5 billion.

Clearwire is a Kirkland, Wash.-based provider of wireless high-speed Internet.

Afren raises £104.9 million

Among other large deals, Afren, a London-based oil and natural gas company, said it raised £104.9 million from a private placement of ordinary shares.

The company sold 129.5 million of the shares at 81p per share.

Afren's stock (London: AFR) closed at 87p. Market capitalization is £645 million.

HealthSport takes in $10 million

HealthSport also completed a private placement financing, bringing in $10 million.

Supplemental Manufacturing & Ingredients LLC was the investor. The deal settled Nov. 6, according to a regulatory filing.

The company issued approximately 66.66 million common shares for proceeds of $2 million, along with an $8 million promissory note.

"The investment is expected to accelerate HealthSport's growth and strengthen its alliances with large pharmaceutical companies to provide the next generation drug delivery technology," the company said in a press release.

"The first phase of our relationship with HealthSport was accomplished in July of this year with the signing of the manufacturing agreement between the two companies," remarked Kevin Taheri, CEO of SMI, in the release. "This investment represents the next step in that relationship, which is to begin the process of making this break-through technology available to the pharmaceutical industry on a worldwide basis."

"It has been apparent for some time that there is a very strong synergistic relationship between SMI and HealthSport," added Hank Durschlag, HealthSport's CEO. "We are looking to take advantage of that relationship to not only produce dietary supplement and OTC film strip products, but also to begin working with pharmaceutical companies to enter the highly profitable prescription pharmaceutical market."

HealthSport's equity (OTCBB: HSPO) improved by a penny, or 6.67%, to $0.16. Market capitalization is $8.1 million.

HealthSport is an Amherst, N.Y.-based developer of nutritional supplements.

Midlands CEO: Time was right for financing

Midlands Minerals wrapped the first tranche of its previously announced C$6 million private placement of units, taking in C$3.21 million.

The deal originally priced Oct. 13 and includes a 30% greenshoe.

The Toronto-based company will sell a total of 40 million units containing one common share and one half-share warrant. The units will sell at C$0.15 each and whole warrants are exercisable at C$0.25 for two years.

Of the units, approximately 9 million were issued on a brokered basis in this tranche, bringing in C$1.35 million. Another 12.42 million units were issued on a non-brokered basis for proceeds of C$1.86 million.

"We went out to raise C$6 million," said Kim Harris, president and CEO, in an interview with Prospect News. In the first tranche, in only a few weeks, we were pleased we were able to close in such a short time and raise over 50%."

Harris said that the company has until Dec. 7 to complete the remainder of the deal. At that time, the price protection will expire.

Also, Harris said that the funds would be used for "some very excellent [drilling] targets." The targets are expected to help the company increase production to 1 million ounces from 400,000 ounces.

As such, "we felt raising the money now was timely."

"We are still open for financing," she concluded. "And we are hoping we can get more."

Midlands' stock (TSX Venture: MEX) increased 1 cent, or 4.76%, to C$0.22. Market capitalization is C$11.8 million.

Blackbird wraps unit sale

Blackbird Investments completed a C$2.98 million private placement of equity units, the company said in a news release.

The deal originally priced at C$2.5 million with a C$500,000 greenshoe on Sept. 2.

The Vancouver, B.C.-based oil and gas company sold approximately 11.91 million of the units at C$0.25 per unit. The units consisted of one common share and one half-share warrant. Whole warrants are exercisable at C$0.40 for three years.

Proceeds will be used for, among other things, the acquisition of a 75% interest in certain oil and gas leases from Maxwell Exploration Inc. in Gray County, Texas.

"I am very pleased at what the Blackbird team has been able to accomplish in such a short timeframe, particularly given the difficult market conditions when we locked up the transaction," said William Macdonald, president, in the release.

"At the time when we entered into the initial agreement for the acquisition, gas was at approximately $2.50, oil was at $58.00 and we had a C$0.87 Canadian dollar. All of these have moved substantially in our favor, making for an even more compelling story."

In an interview with Prospect News, MacDonald said, "We are no longer a capital pool company as a result of this transaction."

MacDonald said the company did an initial public offering in July, raising C$2 million. The company - which at that time was still a capital pool company - then looked for assets and businesses to acquire to move forward. They found the Texas oil assets and proceeded to become a straight oil and gas company.

Also as a result of the conversion, Blackbird's ticker symbol changed to BBI.V from BBI.P.

"It's been a great run," MacDonald said. "We cannot complain."

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