B + H Ocean Carriers raises $60 million; private placement volume improves

By Sheri Kasprzak

Atlanta, May 18 - In a day marked by significant improvements in private placement volume, B + H Ocean Carriers Ltd. led news with word that it has raised $60 million in a stock offering.

Institutional investors in European have subscribed for 3,243,243 shares at $18.50 each in a deal expected to close May 25.

Pareto Securities ASA was the placement agent in the deal.

Based in New York, B + H operates tankers for shipping products across seas. The proceeds will be used to acquire secondhand shipping tonnage, to refinance debt and for working capital.

The company's stock lost $0.20, or 1%, to close at $19.80 on Wednesday.

In the broad private placement market, sell-siders said they were encouraged by better volume after a two-week slump.

"It really has been about two weeks of nothing, but we've had some gains in stocks over the past few days, some issuers are trying different structures to get deals out there and I think we're okay now," said one sell-sider. "I think things are looking up."

In fact, several of the new issues announced Wednesday were convertible deals. Four of the private placements that were either initially announced or that closed Wednesday were convertible note or convertible preferred stock deals.

"Strong stocks the past two days," said another sell-sider when asked what was driving volume Wednesday.

The Dow Jones Industrial Average gained 132.57 to close at 10,464.45; the Nasdaq composite index closed up 26.50 at 2,030.65 and the S&P 500 edged up 11.76 to close at 1,185.56.

There could be bad news for Canadian issuance, however. A drop in oil prices Wednesday may adversely affect the already low volume there.

One sell-sider said energy companies make up the majority of issuers north of the border and weaker oil prices could mean less issuance overall in Canada.

"It certainly doesn't help matters," the market source said when asked about a drop in oil prices Wednesday of almost $2 per barrel.

Oil prices dropped $1.72 to close at $47.25 per barrel.

Omni Energy raises $5 million

Among the convertible offerings wrapped Wednesday, Omni Energy Services Corp. settled a $5 million private placement.

The company sold 5,000 shares of series C convertible preferred stock at $1,000 each to current shareholders and insiders of the company.

The preferreds pay annual dividends at 9% and are convertible into common shares at $1.95 each.

The investors also received warrants for up to 6.55 million shares, exercisable at prices ranging from $1.95 each to $3.50 each for five years.

The company has so far closed a $3.5 million tranche of the deal, with the second tranche expected to close on Aug. 15.

Based in Carencro, La., Omni Energy Services provides seismic drilling services to geophysical companies.

Omni Energy's stock rose $0.14, or 7.87%, to close at $1.92 Wednesday.

NexMed arranges $4.45 million offering

NexMed, Inc. said it plans to raise $4.45 million in a private placement.

The offering includes 445 shares of preferred stock at $10,000 each.

The preferreds are convertible into common shares at $1.36 each.

"It will go well," said one market source familiar with the company. "Looks like a good premium for them."

The offering is a 12% premium to the company's closing stock price of $1.21 on Tuesday.

The investors will also receive warrants for 1,188,931 shares, exercisable at $1.43 each for four years.

Based in Robbinsville, N.J., NexMed is a biopharmaceutical company focused on developing drugs used topically. The proceeds will be used for general corporate purposes.

Pan-Global's C$5 million offering

In Canada, Pan-Global Energy Ltd. announced it plans to raise C$5 million in a convertible debenture offering.

The debentures bear interest at 7% annually, mature Dec. 31, 2010 and are convertible into common shares at C$1 each.

"Here's a prime example," said one Canadian market source of the structure of the Pan-Global offering. "You've got an oil company doing a convertible deal, which says to me, 'Hey, our stocks aren't doing that well because oil is down, here's a way to get some money without suffering even more than we already are.' I think it's a good plan for them."

The conversion price is a 37% premium to the company's closing stock price of C$0.73 on Wednesday.

The company's stock lost a penny after the deal was announced Wednesday morning.

Based in Calgary, Alta., Pan-Global is an oil and natural gas exploration company. The proceeds will be used to work over existing wells and complete and equip previously drilled wells. The remainder will be used for working capital and to fund new drilling.

Avanex's stock drops

Avanex Corp.'s stock edged down Wednesday after the company closed a private placement Tuesday for $35 million.

The issuer's shares dropped a penny, or 0.93%, to close at $1.07 Wednesday, and lost another $0.02, or 1.87%, in after-hours trading.

On Tuesday, when the offering wrapped, Avanex's stock lost $0.04 to close a $1.08 and gained a penny in after-hours trading.

The company sold convertible notes with a conversion price of $1.21 each.

Based in Fremont, Calif., Avanex manufactures photonic components used to speed up fiber optic communications networks.

Healthaxis's stock recovers

Healthaxis Inc.'s stock closed up Wednesday after the company wrapped a $5 million private placement earlier this week.

The company's stock gained $0.04, or 2.42%, to close at $1.69.

On Monday, when the deal closed, the company's stock gained $0.07 to end at $1.87. On Tuesday, its stock closed down $0.2199 at $1.6501.

A day after closing a $5 million private placement of stock, Healthaxis Inc.'s stock took a dip Tuesday.

The company sold shares at $2.25 each to Tak Investments Inc.

Based in Irving, Texas, Healthaxis provides technologies used for business process outsourcing, and claims and administration services for health benefit administrators and health insurance claims processors.

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