MDU Communications raises $20 million; MedcomSoft prices C$5 million stock sale

By Sheri Kasprzak

New York, Sept. 12 - MDU Communications International, Inc. led private placement news on Tuesday with news that it pocketed $20 million from a senior secured revolving credit facility with warrants.

On Tuesday, the company's stock gained 9.23%, or 6 cents, to settle at $0.71 (OTCBB: MDTV).

Volume of the shares traded on Tuesday climbed to 136,333 shares, compared with the average of 59,829 shares.

The five-year facility, funded by Full Circle Funding, LP and FCC, LLC, allows the company to pay interest only on principal drawn during the term of the facility. The full terms of the line could not be determined by press time Tuesday.

The investors will receive warrants equal to 2% of the company's outstanding stock. The warrants will be exercisable at a 30% premium to the stock's market price the day the term sheet was signed.

The company had 50,429,621 shares outstanding as of Aug. 11.

Morgan Joseph & Co. Inc. was the placement agent.

MDU is no stranger to the PIPE market, having closed a $16.25 million offering in November 2004. The company sold 6,063,400 units of one share and one three-tenths share warrant at $2.68 each.

According to the company's latest earning statement, MDU reported a net loss of $2.19 million for the quarter ended June 30, compared with net income of $463,934 for the corresponding quarter of 2005.

"To continue funding subscriber growth, the company must raise additional debt or equity financing, or enter into alliances or collaborative agreements with third parties providing for net proceeds to the company," said the earnings statement.

"No assurance can be given that the company will be successful in obtaining any such financing or in securing collaborative agreements with third parties on acceptable terms ... In the absence of such financing or third-party collaborative agreements, the company will be required to scale back operations and growth and may have an issue as to our ability to continue as a going concern."

Located in Totowa, N.J., MDU provides communication and information services via cable television and high-speed broadband internet access.

In the broader market, stocks continued to climb, but volume remained rather subdued.

"I don't think there's anything in particular" impacting volume, said one sellside market source. "Stocks look good; oil seems to be under control. Good conditions for pricing, so it'll pick up."

Meanwhile, the Dow Jones Industrial Average gained 101.25 to close at 11,498.09; the Nasdaq composite index climbed by 42.57 to end at 2,215.89; and the Standard & Poor's 500 composite index closed up 13.57 to close at 1,313.11.

MedcomSoft's C$5 million deal

In the tech sector, MedcomSoft Inc. priced a previously announced private placement for C$5 million.

The company intends to sell up to 12.5 million shares at C$0.40 each.

Paradigm Capital Inc. and Jennings Capital Inc. are the placement agents.

The deal is scheduled to close Sept. 26.

Proceeds will be used for working capital.

The stock closed unchanged at C$0.40 on Tuesday (Toronto: MSF).

Toronto-based MedcomSoft develops software used in the health care sector.

Premier leads gold deals

Despite continued drops in gold prices, Premier Gold Mines Ltd. negotiated a C$6,937,500 private placement.

News of the offering, released Tuesday afternoon, sent the stock up 3.16%, or 3 cents, to end the day at C$0.98 (Toronto: PG).

Meanwhile, gold prices continued to fall, losing $3.00 on the day to settle at $594.30 per ounce.

Premier said it plans to sell 1.25 million units at C$0.95 each and 5 million flow-through shares at C$1.15 each on a non-brokered basis.

The units include one share and one half-share warrant. The whole warrants are exercisable at C$1.20 each for one year.

Premier, based in Thunder Bay, Ont., is a mineral exploration and development company focused on gold properties.

Elsewhere in gold offerings, Garibaldi Resources Corp. arranged a C$2.4 million private placement Tuesday.

The company's stock ended the day down 2 cents, or 3.45%, to close at C$0.56 (TSX Venture: GGI).

The non-brokered offering includes up to 4 million units of one share and one half-share warrant. Each of the whole warrants is exercisable at C$0.70 for one year.

The company wrapped a similar private placement for C$1 million March 27, selling 2 million units.

Vancouver, B.C.-based Garibaldi is a gold exploration company.

Schuff stock gains 9%

In secondary market action, Schuff International, Inc.'s stock climbed by 9.09% on Tuesday after the company wrapped a $30 million private placement of convertible notes for proceeds of $29.4 million.

The stock climbed by $1.00 to end the day at $12.00 (Pink Sheets: SHFK). On Monday, the stock gained 50 cents, or 4.76%, to close at $11.00.

The 7% notes were issued at 98% of par and are convertible into 2.5 million common shares at $12.00 each. The conversion price is a 14.3% premium to the company's $10.50 closing stock price on Friday.

The proceeds from the deal will be used to retire $30 million of its outstanding $75 million in principal of 10.5% senior secured notes due June 1, 2008. The company will pay 101.313% of face value of the notes plus interest.

Phoenix-based Schuff International provides steel construction services.

Elsewhere, Foothills Resources Inc. saw its stock edge down by 0.98% Tuesday.

The company's stock closed down 3 cents to end at $3.03 (OTCBB: FTRS). The stock fell by 10.53%, or 36 cents, to close at $3.06 Monday when the company closed a $22.5 million private placement of units.

The company issued 10 million units of one share and one half-share warrant. Goldman, Sachs & Co. funded $7.5 million of the placement.

Also on Monday, the company entered into a $42.5 million mezzanine finance facility with Goldman. The facility has a term of four years.

Bakersfield, Calif.-based Foothills is an oil and natural gas exploration, acquisition and production company.

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