ChinaTel to raise $640 million; Westaim wraps first tranche; Azabache plans C$10 million deal

By Stephanie N. Rotondo

Portland, Ore., Feb. 9 - Large deals came back to the PIPE market Tuesday, though many of the deals were getting settled versus being launched.

ChinaTel Group Inc. said it had entered into private stock purchase agreements with two investors for $640 million. The company already took in $2 million and the remainder will come in multiple tranches.

Westaim Corp. also had a triple-digit financing. The company sold subscription receipts in its effort to raise just over C$237 million. The total deal size is C$275 million and the company expects the remaining funds to come within the month.

Among new deals, Azabache Energy Inc. is hoping to raise up to C$10 million via a private placement of stock. The price per share has yet to be determined.

Cedar Shopping Centers Inc. completed a private placement of equity, taking in over $8 million. Those funds will be added to the funds raised in a public offering at the same terms as the private transaction.

Also, PureSpectrum Inc. pocketed $5 million from a sale of preferred shares. The proceeds will be used to grow the business.

ChinaTel to raise $640 million

ChinaTel Group negotiated two private placements of stock for total proceeds of $640 million.

The investors are Excel Era Ltd. and Isaac Organization. The company had already raised $2 million.

According to the terms of the deal, Excel will purchase a total of 159.59 million series A common shares at $3.00 per share. Excel has already purchased $1 million and the remainder will come in three installments, with the final tranche expected to close by June 1.

Isaac will meanwhile buy a total of 53.19 million shares, also at $3.00 per share. Like Excel, $1 million of the shares have already been purchased and the remainder will come in two installments, with the last expected to be finalized by June 1.

The combined investment equals 48% of ChinaTel's total outstanding shares, bring the company's value to over $1.33 billion.

Proceeds will be used to expand the company's wireless broadband networks worldwide and to repay existing debt.

"With this infusion of capital, we can pursue our global expansion plans, and accelerate the deployment of the Chinacomm network in the Peoples Republic of China," said George Alvarez, chief executive officer, in a press release. "We expect to complete build-out of the first twelve PRC cities by June 2011. When completed, the Chinacomm network will be one of the largest wireless broadband networks in the world."

"We have worked very hard to execute transactions beneficial to both our shareholders and our new institutional investors," added Colin Tay, president. "We selected these investment partners because they provide unique alliances that will facilitate ChinaTel's ability to penetrate additional markets globally."

Calls seeking further comment were not returned Tuesday.

ChinaTel's stock (OTCBB: CHTL) gained 28 cents, or 23.01%, to $1.47. Market capitalization is $258 million.

ChinaTel Group is an Irvine, Calif.-based high-speed wireless broadband and telecommunications infrastructure engineering and construction services company.

Westaim wraps first tranche

Westaim completed the first tranche of a private placement of subscription receipts, taking in total proceeds of C$273.37 million.

The deal originally priced at C$275 million on Jan. 25. A second tranche is expected to close by Feb. 19.

In this tranche, Westaim sold approximately 546.74 million subscriptions at C$0.50 each. The subscriptions are convertible into one common share.

Certain subscriptions sold to Alberta Investment Management Corp. are convertible into a mix of common and series 1 class A non-voting preferred shares.

The company could not be reached for comment Tuesday.

Westaim's shares (Toronto: WED) ended steady at C$0.59. Market capitalization is C$55.6 million.

Westaim is a Calgary, Alta.-based technology developer.

Azabache plans C$10 million deal

Azabache Energy is seeking up to C$10 million via a private placement of common stock.

The price per share will be determined within the context of the market, according to a press release.

Settlement is expected by Feb. 26.

Calls seeking comment were not returned Tuesday.

Azabache's equity (TSX Venture: AZA) improved by 2 cents, or 7.14%, to C$0.30. Market capitalization is C$10.86 million.

Azabache Energy is a Toronto-based petroleum and natural gas exploration company.

Cedar Shopping completes stock sale

Cedar Shopping Centers raised $8.25 million from a private placement of equity, according to a regulatory filing.

The deal originally priced Feb. 2 and was sealed Feb. 5. RioCan Holdings USA Inc. was the investor.

The Port Washington, N.Y.-based real estate investment trust sold 1.25 million shares at $6.60 per share.

The private financing came in conjunction with a public offering of shares for the same price. The company raised about $47 million from the public transaction.

Proceeds will be used to repay outstanding amounts under Cedar's secured revolving credit facility.

The company was unavailable for comment Tuesday.

Cedar's stock (NYSE: CDR) dropped 10cents, or 1.52%, to $6.46. Market capitalization is $327 million.

PureSpectrum issues preferreds

PureSpectrum, a Brooklyn, N.Y.-based provider of artificial light solutions, took in $5 million from a private placement of preferred stock.

The deal settled Feb. 5, according to a regulatory filing. Socius Capital Group LLC was the investor.

The company issued 500 of the 10% series A preferred shares at $10,000 each. The investor also received 135% warrant coverage, exercisable for five years.

"This transaction will enable PureSpectrum to access capital at the company's discretion to support our product development and sales efforts as we strive to continue our growth and achieve our ultimate goals," said Lee Vanatta, president and chief executive officer, in a press release.

"As we continue to launch additional product lines in both the compact fluorescent lamp and linear fluorescent categories, we expect the expansion of the company to accelerate. The Socius investment vehicle allows PureSpectrum the authority to utilize funds as needed while making resources available that will ensure timely product delivery as well as provide the means to expand our sales platform to take advantage of domestic and international market opportunities.

"Furthermore, this investment will enable us to continue our work to strengthen our proprietary technology and research additional applications, joint developments or other opportunities that may be available to continue building the PureSpectrum product portfolio and brand."

PureSpectrum's equity (OTCBB: PSRU) fell $0.003, or 4.62%, to $0.062. Market capitalization is $12.4 million.

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