Magellan Aerospace plans C$20 million deal; higher stocks improve volume

By Sheri Kasprzak

Atlanta, May 4 - Magellan Aerospace Corp. led private placement news Wednesday as volume made a comeback as stocks improved.

Magellan said it plans to sell 2 million cumulative redeemable preferred shares at C$10 each.

The preferreds are convertible into 3.33 common shares for each preferred at C$3 each and pay annual dividends at 8%.

Based in Toronto, Magellan manufactures aeroengine and aerostructure components for the aerospace industry. It plans to use the proceeds to reduce debt and for general corporate purposes.

The company's stock closed unchanged at $2.65 on Wednesday.

In the broader private placement market, sell-siders said volume picked up as stocks saw greater gains.

"Things are getting better," said one market source. "Stocks were up today, so that obviously helps."

That sell-sider said the issuers were a mixed bag Wednesday.

"There's really no sector that seemed to be putting more deals out," he said.

The Dow Jones Industrial Average gained 127.69 to close at 10,384.64; the Nasdaq composite index closed up 29.16 at 1,962.23 and the S&P 500 ended the day up 14.48 to close at 1,175.65.

Even though oil prices did make some gains on Wednesday, one Canadian sell-sider said it might be a while before oil companies get back into the private placement game with any regularity.

"I think energy companies are probably cooling their heels for a while," he said. "Oil has been so unstable lately, so they're going to be looking for a little more stability, or else they're going to look for alternative ways to finance if they can."

Oil prices gained $0.63 to close at $50.13 per barrel.

Senesco wraps $3.32 million deal

Senesco Technologies, Inc. closed a private placement of units for $3,319,922 Wednesday.

The company issued 1.57 million units at $2.1146 each.

The units are comprised of one share and one half-share warrant. The whole warrants allow for an additional share at $3.38 each.

The company's stock dove $0.49, or 17.63%, on Wednesday, to close at $2.29.

"Their stock dipped significantly," said one market source. "This was done at an enormous discount, so I think they're paying for it now. The warrants may actually be okay for them, but this deal was priced way too low I think."

Oppenheimer & Co. Inc. was the placement agent.

"We are pleased to have been able to raise equity in this difficult market," said Joel Brooks, the company's chief financial officer, in a statement. "We believe that this financing, along with our current working capital, will provide us with sufficient funds so that we can continue to execute our research and operating plans for approximately the next two years."

Based in New Brunswick, N.J., Senesco is a biotechnology company focused on delaying cell breakdown in plants. The proceeds will be used for working capital.

Electric City raises $5.62 million

Electric City Corp. said it has closed a private placement for $5,625,000.

The company sold 6.25 million units at $0.90 each to four investors.

The units are comprised of one share and one half-share warrant. The whole warrants provide for an additional share at $1.05 each for three years.

The company used a portion of the proceeds from the private placement to close its acquisition of Maximum Performance Group, a web-based real-time energy asset management provider.

Electric City, based in Elk Grove Village, Ill., manufactures energy-saving technologies and automation systems.

The company's stock closed up $0.03 at $0.99 on Wednesday.

Fortress raises $3 million

Over in the natural resources market, Fortress Minerals Corp. said it will raise $3 million in a private placement with Phelps Dodge Exploration Corp. over the course of two years.

Fortress has already received $1.7 million in the first portion of the deal by selling 2,656,250 shares at $0.64 each.

Phelps will invest in shares next year for total proceeds of $1.3 million. The shares will be priced at market price plus 50%.

"It's a good plan for them," said one market source familiar with the natural resources sector. "They seem to have priced it well for this round and there's a big premium to look forward to next year. So not too shabby."

Based in Vancouver, B.C., Fortress is a mineral exploration company. It plans to use the proceeds for exploration expenses.

Fortress's stock closed unchanged at $0.53 Wednesday.

Freewest arranges deal

Another mineral exploration company, Freewest Resources Canada Inc., announced its plans to raise C$1.12 million in a private placement.

The offering includes 3.5 million flow-through shares at C$0.32 each.

Canaccord Capital Corp. is the placement agent in the deal.

"Minerals have been doing well," said a sell-sider familiar with the sector. "I think it looks pretty good. For tax purposes, it will serve them well, so I think it will go well either way."

Based in Montreal, Freewest is a mineral exploration company focused on gold and base metals. The proceeds from the offering will be used for the company's 2005 exploration programs in Canada.

Freewest's stock closed unchanged at C$0.229 on Wednesday.

Commercial Solutions' stock rises

A day after announcing the pricing of its C$5,625,000 private placement, Commercial Solutions Inc.'s stock made gains.

The company's stock rose C$0.05 to close at C$2.75 Wednesday.

On Tuesday, when the pricing was first announced, the company's stock remained unchanged at C$2.70.

The company plans to sell shares at C$2.50 each.

Based in Edmonton, Alta., Commercial Solutions is an independent industrial distributor to maintenance repair and operations and original equipment manufacturer customers.

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