Equitable raises tier 1 capital on strong market; Archangel, Eitzen Maritime close private placements

By Kenneth Lim

Boston, June 25 - Equitable Group Inc. is taking advantage of a strong Canadian mortgage market to raise capital through an offering of stock.

Meanwhile, Archangel Diamond Corp. said it raised $172.4 million from a sale of subscription receipts, while Eitzen Maritime Services ASA is offering NOK 257 million worth of shares in a private placement.

Equitable eyes growth

Equitable Group said it plans to offer C$5.16 million in a non-brokered private placement of stock in a private placement as the company seeks to increase its regulatory capital.

The placement will be carried out concurrently with a planned $34.4 million public shelf offering.

The private sale involves 240,000 common shares, while the public offering will comprise 1.6 million shares. All the shares will be offered at C$21.50 apiece.

Equitable common stock (TSX: ETC) closed at C$21.54 on Wednesday, lower by 3.19% or C$0.71.

The private portion of the capital raise will be sold to Emberwood Glen Enterprises Ltd., a holding company that is controlled by Equitable directors Austin and Eric Beutel.

Equitable, a Toronto-based mortgage financing company, said it will use the proceeds to invest in the equity of its subsidiary, Equitable Trust Co., and to enhance its tier 1 capital.

"This offering accelerates our previously announced intention to increase our total capital ratio," Equitable president and chief executive Andrew Moor said in a statement.

"It positions us to generate sustained growth while meeting our capital targets. During the second quarter of fiscal 2008, we anticipate securitizing CMHC-insured mortgage loans valued at approximately C$410 million, which is well beyond historical levels. As a result of progress with our business plan and the opportunities we see ahead, we believe the timing of this financing is appropriate."

Moor told Prospect News that the capital raise was a significant move for the company because the Canadian mortgage market is doing well and the company wants to ride the growth.

"It's a good opportunity for us because the Canadian mortgage market is strong right now, and we want to take advantage of that," he said.

Moor declined to comment on the pricing of the deal, and said Equitable has no plans for further fundraising.

"It's very unlikely we'll come to the market again any time soon," he said.

Archangel raises $172.4 million

Archangel Diamond Corp. said it sold $172.4 million worth of subscription receipts in its previously announced placement, a modest increase from the initial amount, although on a large deal.

The deal priced for $170 million with a $30 million greenshoe on June 3.

The company sold 137.92 million subscription receipts at $1.25 apiece. Of the receipts, 1.92 million were part of the partially exercised greenshoe. Each subscription receipt will be exchanged for one unit of one common share and one half-share warrant pending the release of the proceeds from escrow. Each warrant is exercisable at $1.50 for two years.

Archangel common stock (TSX: AAD) was unchanged on Wednesday at C$1.40.

Exisiting investors of Archangel took the bulk of the receipts. Cencan SA bought 92.8 million receipts for $116 million, increasing its stake to about 65%. Firebird Global Master Fund Ltd. acquired 24 million receipts for $30 million, but its stake was diluted to 18%.

The proceeds of the deal will be held in escrow until Archangel completes the conditions necessary for its acquisition of a 49.99% interest in OAO Arkhangelskoe Geologidobychnoe Predpriyatie. If the release conditions are not met, the receipts will be canceled and the proceeds returned to investors.

Based in Toronto, Archangel is a diamond exploration company.

Eitzen closes deal

Eitzen Maritime Services said its planned offering of NOK 257 million worth of stock was fully subscribed. The deal was announced on June 12.

Eitzen sold about 85.7 million common shares at NOK 3 per share. Eitzen common stock (Oslo: EMS) closed at NOK 2.98 on Wednesday, up by NOK 0.01.

Proceeds will be used for the company's planned acquisition of Seven Seas Shipchandlers LLC.

Oslo-based Eitzen Maritime provides ship supply, ship logistics, crew management and ship brokerage services.

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