Fairborne prices C$100 million; Elixir to raise $52.5 million; Caledon completes £15 million

By LLuvia Mares

New York, Oct. 22 - Monday was no exception to the recent popularity of the oil and gas sector in the PIPEs market. The market saw a couple of oil and gas private placement deals. However, one market analyst said this streak may be coming to an end in the near future.

"Oil and gas prices have been weaker which may limit Canadian issuance," said the market analyst, describe the sharp decline in Monday's session.

Leading PIPEs news, Fairborne Energy Trust negotiated a C$100 million private placement of shares.

Closing of the placement is conditional on the closing of the company's planned reorganization, under which Fairborne Energy is proposing to convert itself from a trust into a regular corporation.

Proceeds will be used to repay debt.

"We see greater value creation to securityholders from investing all of our cash flow in our existing assets and growth opportunities than under the current trust structure," said Steve VanSickle, company president and chief executive officer, in a press release.

"The Denham investment will significantly improve our balance sheet without diluting existing shareholders as the equity investment is at a substantial premium to the current unit price.

"The reorganization will enable us to aggressively pursue identified opportunities on our existing asset base. We are confident that our team can deliver production growth that will more than offset the value of the lost tax shields through the end of the tax fairness period in 2011. We are delighted that, after significant study, a leading private equity firm like Denham, shares our vision and has agreed to acquire approximately a 16% interest in Fairborne."

The company will sell 13.4 million common shares at C$7.45 apiece to Denham Capital Management LP.

The company's stock (Toronto: FEL.UN) closed at C$6.41, down C$0.49 from Friday's C$6.90 close.

Fairborne is Calgary, Alta.-based oil and gas income trust established from the reorganization of Fairborne Energy Ltd. in June 2005. The trust uses development drilling in four core areas of Alberta.

Caledon completes £15 million

Caledon Resources plc announced it arranged a £15 million private placement of 8.5% convertible loan notes due 2010.

Canaccord Adams Ltd. was the agent and bookrunner for the deal, which will close on Nov. 8.

Proceeds will be used to finance the Minyango acquisition, to accelerate capital expenditure on the continuing development of the Cook Mine and coal wash plant and to provide additional working capital.

London-based Caledon Resources is a mining exploration holding company.

Elixir to raise $52.5 million

Elixir Gaming Technology announced Monday it plans to raise $52.5 million in a private placement of stock.

"We believe the equity offering and warrant transaction represent important positive developments in the growth of Elixir Gaming," said Gordon Yuen, company executive chairman and chief executive officer, in a press release.

"This financing provides us with financial flexibility to purchase the electronic gaming devices necessary to fulfill the placement commitments announced to date and to continue pursuing our strategies for expansion. We appreciate the confidence of the participating investors in Elixir Gaming and our long-term plans for growth.

"With the proposed revisions to the warrant agreements, we will simplify our capital structure and materially reduce the fully diluted share count. We value the support of our major shareholder in facilitating the warrant-equity exchange."

The company entered into a definite agreement with a group of institutional investors to sell 15 million shares of stock at $3.50 each. No warrants were issued in the transaction.

The company's stock (Amex: EGT) closed at $4.26 on Monday, up $0.10 from Friday's close at $4.16.

ThinkEquity Partners, LLC was the placement agent.

The proceeds will be used to repay debt, fund the purchase of electronic gaming machines and for general working capital purposes.

Macau-based Elixir specializes in gaming machine technology.

Shiner settles $10.5 million

Shiner International, Inc. announced today it completed a $10.5 million equity financing with a group of institutional investors.

"Shiner is pleased to have received strong institutional investor interest in this offering," said Jian Fu, company chief executive officer, in a press release. "As Shiner provides innovative and patented technology solutions to China's rampant problems with counterfeit goods, we look forward to continued sales and earnings growth in 2007 and beyond."

The company sold 3.5 million shares of stock at $3.00 per share and one warrant to purchase 525,000 shares at an exercise price of $6.00 each. The warrants expire in three years.

Shiner's stock (OTCBB: SHNL) closed at $6.00, down $0.60 from Friday's close at $6.60.

Shiner will use the proceeds for equipment upgrades, strategic M&A and worldwide market expansion of its patented coated films and anti-counterfeit film products.

Hainan Province, China-based Shiner International specializes in anti-counterfeit plastic films.

Natural Health Trends to raise $3.74 million

Natural Health Trends Corp. announced it plans a private placement of convertible debentures and warrants for $3.74 million.

"This financing attests to our strong commitment to our members around the world and provides the company with additional resources to invest in the long-term opportunities available to us while withstanding our shorter-term business volatility," said Chris Sharng, company president.

"Over the summer months, we deliberately kept the company's marketing programs in our China market at a lower profile. At the end of the second quarter, we also began to implement a change to our commission plan that we believe will promote earlier commission payments.

"With more marketing activities in the next few months, we are taking a conservative approach to make sure we can properly support our members as well as the exciting events we have planned for Hong Kong, China, and Europe. Finally, we can also use the new financing to facilitate additional cost reduction measures to further lower our fixed costs in the U.S. and various international markets."

The debentures will have a face amount of C$4.25 million and may be converted into 1,496,000 shares.

The debentures will have a coupon of the greater of Libor plus 400 bps or 10% per year. The notes mature in two years, unless extended by their holders for an additional three years. Under certain conditions, the company may force conversion or redemption.

The financing includes seven-year warrants to buy 1,496,000 shares at $3.52 per share and one-year warrants to buy 1,496,000 shares at $3.52 per share.

Natural Health Trends' stock (Nasdaq: BHIP) closed at $2.90, down $0.60 from Friday's $3.60 close.

Proceeds will be used for additional working capital.

Dallas-based Natural Health Trends is a direct-selling and e-commerce company focused on personal care products.

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