NCI to raise $250 million; Glamis wraps equity sale; McPherson's hopes to raise A$15 million

By Stephanie N. Rotondo

Portland, Ore., Aug. 14 - NCI Building Systems Inc. brought the day's largest PIPE to market, by far, on Friday.

The company said it intended to raise $250 million via a sale of convertible preferred shares. The shares will be sold to a single investor, and the company hopes the new capital will address its "capital structure issues."

Meanwhile, Glamis Resources Ltd. said it settled a C$90 million bought-deal placement of equity. The deal included a fully exercised greenshoe.

In news from Down Under, McPherson's Ltd. announced a plan to raise A$15 million through an A$12 million private placement and a A$3 million share purchase plan. Proceeds will be used to reduce debt.

Tree island Wire Income Fund is aiming to shore up its balance sheet with a C$9.75 million private placement of convertible debentures. In addition, the company is also planning a C$10 million rights offering.

Elsewhere, Benton Resources Corp. said it upsized a placement of flow-through shares. The company now intends to take in C$2.6 million, compared to the original pricing of C$2.3 million.

NCI to raise $250 million

NCI Building Systems will conduct a $250 million private placement of convertible participating preferred shares, according to a press release.

The preferreds will be sold to Clayton, Dubilier & Rice Fund VIII, LP. The shares are initially convertible into 106.8 million common shares and carry a dividend of 8% in cash or 12% in kind.

The funds will help the company achieve its goal to address what it called its "significant near-term debt repayment obligations." NCI plans to reduce its debt by $323 million, thereby better positioning the company for growth.

Before the transaction can close, certain conditions must be met. NCI is in process of meeting those criteria, including amending its existing $293 million term loan and modifying the terms and maturity on its remaining $150 million of debt.

NCI also wants to conduct an exchange offer for its existing convertible notes, offering holders of the securities $500 in cash and 125 common shares in exchange for each $1,000 principal amount.

Upon completion of the deal, the investor will hold a 72% ownership position in NCI. Settlement is expected by the end of the fiscal year.

"As a result of this transaction, we will resolve our capital structure issues and gain the flexibility to ride out the current economic crisis and benefit from improved market conditions over the next several years," noted Norman C. Chambers, chairman, president and chief executive officer of NCI, in the release.

"After many months of exploring a broad range of solutions, we are convinced the CD&R Fund's investment, while unfortunately very dilutive, is in the best interests of our shareholders. In addition to substantially reducing the financial risk that has weighed heavily on the company, this transaction will allow our shareholders to benefit from ongoing improvements in operating performance driven by our recent restructuring programs as well as the growth opportunities we will have in better economic times."

NCI's stock (NYSE: NCS) dipped 6 cents, or 1.49%, to $3.98. Market capitalization is $85.5 million.

NCI Building Systems is a Houston-based integrated manufacturer of metal products for the nonresidential building industry.

Glamis wraps equity placement

Glamis Resources closed on a C$90 million bought-deal private placement of equity, the company announced.

The deal originally priced at C$75 million, with a C$15 million greenshoe, on July 23. The greenshoe was fully exercised.

The Calgary, Alta.-based company issued 72 million class A shares - 12 million of which were part of the greenshoe - at C$1.25 per share.

Proceeds from the financing will be used to fund, in part, Glamis' acquisition of Bonavista Energy Trust's southeast Saskatchewan assets. That deal was also announced July 23.

Under the terms of the acquisition, Glamis will pay Bonavista C$91.3 million in cash, as well as 3.95 million Glamis shares. The purchase is expected to close by Aug. 31.

Calls made to the company seeking comment went unreturned Friday.

Glamis' equity (TSX Venture: GLM.A) dropped 27 cents, or 11.89%, to C$2.00 on Friday. Market capitalization is C$52.7 million.

McPherson's aiming for A$12 million

Mulgrave, Australia-based McPherson's plans to pocket A$12 million from a private placement of ordinary stock.

The company will sell about 5.71 million of the shares at A$2.10 per share. The shares will be sold through Linwar Securities Pty Ltd.

Additionally, McPherson's will offer retail shareholders the opportunity to participate in an underwritten share purchase plan in an effort to raise A$3 million. Linwar is the underwriter, and the shares will be offered at the same price as the private placement.

In a press release announcing the deals, the company said that the proceeds would be used to reduce debt, as well as to "substantially strengthen the company's balance sheet."

Settlement is expected by Aug. 19.

McPherson's shares (Australia: MCP) closed at A$2.41 on Friday.

McPherson's is an importer, exporter and marketer of kitchen knives, scissors, cutlery, kitchen utensils, glassware, hair, beauty and personal care products, plastic bags, wraps, foils and other consumer products.

Tree Island selling 10% convertibles

Tree Island Wire Income Fund is selling C$9.75 million of 10% five-year second-lien convertible notes, according to a press release.

The Futura Corp. and Marret Asset Management Inc. plan to buy C$3.75 million of the notes in the non-brokered private placement. Arbutus Distributors Ltd. will invest the remaining C$2.25 million.

Each debenture is convertible into units at C$0.50 per unit. Futura and Marret will also receive 1.875 million warrants each, while Arbutus will receive 1.125 million warrants. The warrants are exercisable into units at C$0.75 for five years.

Also, Tree Island will conduct a C$10 million rights offering for existing unitholders. The offering will allow unitholders to purchase the debentures, receiving one right per each unit held. Each 220.067 rights held allow the unitholders to subscribe for C$100 principal amount of the notes. Futura has agreed to invest C$1.25 million in the rights offering, and Marret has agreed to buy C$528,613 plus $49.4% of the difference between C$3.25 million and the amount of the rights subscribed to by existing investors, up to a maximum of C$1.25 million.

Arbutus will buy C$11,360 plus 50.6% of the difference, up to C$750,000.

"Tree Island continues to experience very weak business conditions and this financing will allow the fund to address current challenges and provide sufficient flexibility to execute its business plan through the current downturn," said Ted Leja, president and CEO, in a press release.

"I am pleased to announce this financing," remarked Amar S. Doman, chairman of Tree Island, in the release. "This is a very important step in our overall plan to rebuild Tree Island. The availability of additional working capital will provide Tree Island with greater flexibility and position it to take advantage of improvements in markets as they occur."

Settlement of the private placement is expected sometime in August, while the rights offering will conclude in October.

Tree Island's equity (TSX: TIL.UN) slipped a penny, or 1.23%, to C$0.80 on Friday. Market capitalization is C$16.1 million.

Tree Island is an open-ended, limited purpose trust based in Richmond, B.C.

Benton upsizes stock sale

Benton Resources announced it lifted a previously announced private placement of equity to C$2.6 million from C$2.3 million.

The deal originally priced Aug. 12.

The Thunder Bay, Ont.-based company will now issue 5.2 million flow-through common shares at C$0.50 each. Investors in the non-brokered deal will also receive 6% warrant coverage, exercisable at C$0.50 for 18 months.

The funds will go toward upcoming drill programs at Benton's Copper Hill Block A and Saganaga gold properties.

Benton's stock (TSX Venture: BTC) ended unchanged at C$0.42 on Friday. Market capitalization is C$28.8 million.

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