A&P to issue $175 million converts; Glamis announces bought deal; Emgold secures equity line

By Stephanie N. Rotondo

Portland, Ore., July 23 - Of Thursday's private placements, Great Atlantic & Pacific Tea Co. Inc. and Glamis Resources Ltd. brought some of the day's biggest deals. The mining sector was otherwise the dominator of the day.

Great Atlantic & Pacific Tea announced it would sell $175 million worth of 8% convertible preferred stock. Funds will be used to strengthen the company's balance sheet. Also, the company released its first-quarter results.

Glamis meanwhile said it would raise C$75 million in a bought deal. Proceeds will be used to fund planned acquisitions.

In the mining sector, Emgold Mining Corp. inked a deal with Dunn Capital Partners for a C$6 million equity line. Antares Minerals Inc. also said it raised C$6 million via a sale of equity units.

Away from that, Chelsea Therapeutics International Ltd. said it would conduct a $12.6 million registered direct offering. The financing will help the company advance its product lines.

A&P to issue convertibles

Great Atlantic & Pacific Tea - otherwise known as A&P - arranged a $175 million private placement of 8% convertible preferred stock, according to a press release.

Under the terms of the deal, the Yucaipa Cos. LLC will purchase $115 million of the convertibles, while Tengelmann Warenhandelsgesellschaft KG will buy $60 million.

The stock will pay interest at 8% in cash or at 9½% in additional preferreds. The shares are convertible into common stock at a conversion price of $5.00 per share, which represents a 7½% premium.

"With these new funds, A&P will be able to strengthen its balance sheet and have significantly increased liquidity available to pursue its business strategy thereby better positioning the company to compete in the dynamic food retail industry," the company said in the release.

"This investment further solidifies Tengelmann's over 30 year commitment to the company's success," stated Christian Haub, executive chairman of A&P and co-chief executive of Tengelmann, "Partnering with Yucaipa is an exciting opportunity to collaborate with one of the most successful investors in the supermarket industry, Ron Burkle. We believe this strategic partnership has the potential to unlock significant shareholder value and I look forward to working with Ron to make this a reality."

"I've known and respected Christian for over a decade," added Burkle, chief executive of Yucaipa. "We have had a great relationship and we appreciate this opportunity to invest with them."

"This deal reconfirms Tengelmann's long-standing commitment to this company and our strategic plans," concluded Eric Claus, president and CEO of A&P. "The addition of Yucaipa as a significant investment partner provides the necessary resources to successfully execute our strategies and navigate through this difficult economy effectively with a focus on building sustainable profitability in the longer-term."

In addition to announcing the financing transaction, A&P also released its first-quarter results.

For the period ending June 20, A&P saw sales of $2.8 billion, compared with sales of $2.9 billion the year before. Comparable store sales decreased 3.3%.

Adjusted EBITDA came to $80 million, versus $96 million in 2008. Adjusted income from operations dropped to $2.3 million from $16.2 million. Loss from operations declined to $58.3 million, down from $2.8 million year over year.

"This quarter was challenging for our company as the retail market continues to experience one of the most difficult economic environments in history," Claus said. "Our decline in comparable store sales this quarter was driven by a decline in the rate of our retail inflation, more promotional purchases and customers buying less."

A&P's equity (NYSE: GAP) improved by 74 cents, or 15.91%, to $5.34. Market capitalization is $299 million.

Great Atlantic & Pacific Tea is a Montvale, N.J.-based supermarket chain.

Glamis announces bought deal

Glamis Resources will take in C$75 million from a bought-deal private placement of equity.

The Calgary, Alta.-based company plans to issue 60 class A shares at C$1.25 per share.

The deal also includes a C$15 million greenshoe. Settlement is expected by Aug. 14.

Proceeds from the financing will help Glamis pay for its planned acquisition of Bonavista Energy Trust's southeast Saskatchewan assets. The acquisition agreement was inked June 1 for C$91.3 million in cash and approximately 3.95 million shares of Glamis stock. Closing of the asset purchase is expected by Aug. 31.

Also, Glamis said it will acquire Renegade Oil & Gas Ltd and Medora Resources Inc.

"The acquisitions dramatically increase Glamis' operational presence and opportunity inventory in its light oil focus area of southeast Saskatchewan and Manitoba," the company said in a news release. "Glamis will now be at a size to undertake a full-cycle exploration program and effectively develop a light oil resource play. The company anticipates the financing will result in an under-levered balance sheet, providing certainty to the execution of a capital program and the ability to better weather any commodity volatility, with the flexibility to be opportunistic on future acquisition targets."

Glamis' shares (TSX Venture: GLM.A) gained 17 cents, or 9.83%, to C$1.90. Market capitalization is C$42.1 million.

Glamis Resources is an oil and gas company.

Emgold secures equity line

Emgold Mining secured a C$6 million two-year equity line with Dunn Capital Partners, the company said.

The line can be drawn down in maximum C$500,000 tranches. The price per share will be calculated based on an agreed upon discount to the stock price for a five-day period following the draw notice.

"We are pleased to have Dunn Capital Partners come on board as a financial partner to help us advance the Idaho-Maryland Project in Grass Valley, California," said David Watkinson, president of Emgold, in a press release. "We believe this represents the beginning of an ongoing relationship with Dunn Capital and I am excited about the prospects of this long term relationship for future growth of the company."

Emgold's stock (TSX Venture: EMR) fell 4 cents, or 36.36%, to C$0.07. Market capitalization is C$13.8 million.

Emgold Mining is a Vancouver, B.C.-based mining company.

Antares settles unit placement

Elsewhere in the mining sector, Antares Minerals wrapped a C$6 million private placement of common share units, according to a press release.

The company sold 5 million units to International Finance Corp. at C$1.20 per unit. Each unit holds one common share and three-quarters of a warrant. Each whole warrant is exercisable at C$2.00 for five years.

"Proceeds of the financing will be used to advance the company's Haquira project in Peru," the release said. "The 2009 drill program is expected to commence this week. The initial phase of the program will utilize four rigs and will test four new exploration targets within the immediate area of influence of the known mineralization at Haquira, including the adjoining Cristo de los Andes property that was optioned last year from Southwestern Resources.

"All four of these exploration targets have the potential to add significant tonnage to the already sizeable Haquira deposit (8.6 billion lbs contained Cu at a 0.2% cutoff)."

Antares' equity (TSX Venture: ANM) increased 8 cents, or 7.27%, to C$1.18. Market capitalization is C$60 million.

Antares Minerals is a Waterdown, Ont.-based mineral exploration company focused on properties in Latin America.

Chelsea plans direct offering

Chelsea Therapeutics International is planning an approximately $12.6 million registered direct offering of stock, the company announced.

The Charlotte, N.C.-based biopharmaceutical company will issue approximately 3.33 million common shares at $4.00 per share.

Funds from the financing will go toward advancing the company's droxidopa line, which is an "orally active synthetic precursor of norepinephrine initially being developed for the treatment of neurogenic orthostatic hypotension," the company said in a press release.

According to Kathryn McNeil, a spokesperson for Chelsea, the drug is nearing the end of its phase 3 clinical trials and will soon be heading to the Food and Drug Administration for approval. As such, McNeil said there were also "time sensitive pre-launch initiatives" that must be completed.

"We wanted to ensure that we had sufficient funds to do that without depleting funds for continuing operations," she told Prospect News.

McNeil added that existing investors had previously expressed "general interest" in participating in the company's financings.

In addition to funding the launch of droxidopa, Chelsea will also use proceeds for general corporate purposes, including developing the company's other products, such as CH-1504 and CH-4051, drugs for the treatment of immunological disorders.

Chelsea's stock (Nasdaq: CHTP) jumped 31 cents, or 6.30%, to $5.23. Market capitalization is $151 million.

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