Guaranty Financial sells $561.42 million; Royale Energy plans $4 million; X-Terra hopes for C$9.5 million

By Devika Patel

Knoxville, Tenn., June 9 - Guaranty Financial Group Inc. plans to raise $561.42 million in a convertible preferreds PIPE, Royale Energy Inc. plans a $4 million PIPE to advance its drilling and development activities and X-Terra Resources Corp. has arranged a C$9.5 million units' sale designed to help the company explore its properties in the Quebec Lowlands.

Guaranty Financial places more preferreds

Guaranty Financial Group said it will raise $561.42 million through a private placement of convertible preferreds.

The company already had raised $38.26 million through a May investment by TRT Financial Holdings, LLC. Robert Rowling, chairman of TRT, was then elected to Guaranty Financial's board as part of the deal.

In the latest convertible preferreds' sale, the company will sell 5.54 million convertible perpetual cumulative preferred shares at $51.70 apiece for $286.42 million.

Guaranty Financial also plans to sell units of subordinated debt and 638,000 convertible perpetual cumulative preferred shares for $275 million. The subordinated debt will be issued by Guaranty Bank.

Keefe, Bruyette & Woods, Inc. is the agent.

"We are excited that our investment will assist Guaranty in its efforts to work through current market conditions, and provide Guaranty the ability to continue to work toward their long-term plans," Icahn Capital LP's chairman Carl Icahn, and one of the investors, said in a press release.

"These agreements complete a very significant step toward fortifying our balance sheet and supporting Guaranty's long-term potential," Guaranty's president and chief executive officer Ken Dubuque said in the release. "We are pleased to have the support of our largest current shareholders, as well as that of new investors."

Guaranty Financial is a provider of commercial and retail banking, based in Austin, Texas. Its shares (NYSE: GFG) lost 8.15%, or $0.49, to close at $5.49 on Monday.

Royale Energy raises funds for expansion, drilling

Royale Energy is planning to sell $4 million of common shares in a deal aimed to accelerate drilling and development on several key projects.

According to chief financial officer Stephen Hosmer, "The increased working capital will open the door to increased activity in both the Rio Bravo and Moon Canyon [Uintah Basin] fields. We anticipate that rising inflation will lead to high costs of exploration, and therefore want to perform key exploration and development activity with all diligence."

In March, the company announced that its oil and gas reserves were up 28%, resulting in the company's shares increasing by 69% in the ensuing months.

Royale's shares (Nasdaq: ROYL) slipped about 0.77% Monday, or $0.06, to close at $8.43.

Royale Energy is an independent oil and gas producer based in San Diego, Calif.

X-Terra to use funds for exploration

X-Terra Resources, a uranium and gold explorer based in Vancouver, B.C., priced a placement of C$9.5 million in units of one common share and one warrant at C$1.90 per unit.

The PIPE will be conducted by agent PowerOne Capital Markets Ltd.

The company priced the deal for C$7.6 million Monday morning, but increased it a few hours later. The funds will be used to explore the company's shale gas property in the Québec Lowlands and for working capital.

The staked land in Quebec is in close proximity to Junex Inc. and Intragaz Exploration near Shawinigan, Québec, and Squatex Resources and Gastem in the Rimouski, Québec area.

In an earlier news release, on June 2, the company announced it had obtained permits to explore more prospects in the Lowlands. The company expects this area will prove profitable in the coming months. Its management is devoted to "aggressively expanding and exploring existing (uranium) properties," the company's Web site reports, because of "the global need for clean energy through nuclear power."

"The province of Quebec represents a vast territory where minerals and hydrocarbons potential are still largely underdeveloped. At this time, X-Terra has a diversified portfolio of exciting prospects. Management expects to be able to start up work programs shortly to explore the economic possibilities of these prospects," X-Terra's president and chief financial officer Laurent Halle said in the June 2 press release.

The company's shares (TSX-Venture: XT) dropped 1.81%, or C$0.04, to close at C$2.17 on Monday.

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