BearingPoint plans $250 million private placement; gold makes a comeback

By Sheri Kasprzak and Ronda Fears

Atlanta, April 20 - BearingPoint, Inc. led private placement action Wednesday with its late-day announcement of a $250 million offering.

The company plans to sell series C convertible debentures to accredited institutional investors.

The details of the offering weren't available at press time Wednesday, but the proceeds will be used to collateralize or replace letters of credit under its existing credit facility. The company may terminate its current credit facility. The proceeds will also be used to support letters of credit or surety bonds and for general corporate purposes. As of April 19, there were $88.1 million of letters of credit outstanding.

Morgan Stanley is the lead placement agent in the offering.

On Dec. 17, BearingPoint sold $400 million of 20-year Rule 144A convertible bonds in two parts at par via joint bookrunners Banc of America Securities and JPMorgan Securities. The Series A, non-callable for seven years, will yield 2.5% with a 35.5% initial conversion premium. The Series B, non-callable for 10 years, will yield 2.75% with a 35.5% initial conversion premium.

At the same time of the Rule 144A convertible offering, BearingPoint said it replaced its then-current credit facility with a new $400 million senior revolving credit facility. Proceeds from both transactions are earmarked to repay its $220 million of senior notes and its $135 million previous revolving credit facility. Along with retiring the senior notes, BearingPoint said it would pay a make-whole premium, plus other expenses, totaling $27 million, which will be charged to earnings in fourth quarter.

On Wednesday in a Securities and Exchange Commission filing, BearingPoint said that a previously reported "triggering event," resulting from a combination of various factors including downgrades in its credit rating in December, would result in an estimated impairment charge of $250 million to $400 million to fourth quarter results, which are being restated.

Based in McLean, Va., Bearing Point is a management consulting company.

On Wednesday, BearingPoint's stock closed down $0.10 at $7.77.

In other private placement news, gold companies made a comeback in the market Wednesday thanks to a boost in gold stocks earlier in the week.

"We've definitely seen more gold issuers out there today," one market source familiar with resources said. "Gold had been down last week and the issuers went away with it, so we're seeing more. Monday and Tuesday gold prices saw some significant gains."

Hawkeye Gold & Diamond Inc. and Candente Resource Corp. are among the gold exploration companies that announced private placement offerings Wednesday.

The source also noted that mineral stocks have been improving as well, which may spark an increase in the number of those deals in the market.

Petrosearch raises $12.6 million

Over in the oil sector, Petrosearch Energy Corp. finished two private placements to raise $12.6 million.

In a brokered offering, the company sold 8,153,846.15 shares at $1.30 each and 1,538,461.54 at the same price in a non-brokered deal.

"Their stock is up today and it was a well-priced deal," said one market source familiar with the offering. "I'd say it went well. Any time a company's stock benefits from the offering, it's a good thing."

Petrosearch's stock closed up $0.13 at $1.30 on Wednesday.

Sterne, Agee & Leach, Inc. was the placement agent for the brokered portion of the deal.

"The completion of this placement is an important step in implementing the company's business plan and strategy," said Richard Dole, the company's chief executive officer, in a statement.

"We are pleased to establish our strategic direction and have demonstrated confidence in the company to execute the growth strategy. Because of our unique business model, we have an abundance of high-quality prospects and projects that we constantly evaluate and rank on a dynamic basis. The availability of this new capital will permit us to continue to exploit and grow the value of our current portfolio of assets in addition to undertaking new projects. Specifically, it will allow us to immediately accelerate our drilling activities in several areas of Texas, in the Anadarko Basin of Oklahoma, and in Mississippi."

Based in Houston, Petrosearch is an oil and natural gas exploration and development company. It plans to use the proceeds for general corporate purposes, including the drilling of projects in its inventory.

Multimedia Nova's $4 million deal

Multimedia Nova Corp. said it has raised $4 million in a private placement.

The company sold a secured convertible note to a New York-based institutional investor.

The note matures April 28, 2010; bears interest at Prime plus 200 basis points and is convertible into class A subordinated voting shares at $8 each, a significant premium to its closing stock price on Wednesday. The company's stock closed unchanged at $0.15 Wednesday.

"We are delighted to have completed this financing," said Lori Abittan, the company's president and chief executive officer, in a statement. "The proceeds will allow Multimedia to repay various credit facilities, term loans and other obligations, as well as provide capital for expansion of its existing business operations and possible acquisitions.

"We believe this financing recognizes the inherent value and potential for Multimedia and will allow us to take our company to another plateau."

Based in Toronto, Multimedia is a media company with newspaper interests, including a newspaper based in Italy.

Loretta Food arranges C$3 million deal

Loretta Food Group Inc. announced its plans to head to the private placement market with an offering for up to C$3 million and at least C$1,499,958.

The company plans to sell up to 11,111,100 subscription receipts and at least 5,555,400 receipts at C$0.27 each.

The company is currently in talks with CPVC Tremblant Inc. for a reverse takeover.

Following the acquisition, the investors of the receipts will receive one common share of Tremblant for every three receipts.

If the company does not go public within four months of the closing of the private placement, the investors will receive 0.3667 common shares in exchange for each receipt.

Dundee Securities Corp. and Raymond James Ltd. are the placement agents in the offering.

"We welcome the opportunity to have both Dundee and Raymond James co-lead our private placement financing," said Al Burgio, Loretta's chairman and chief executive officer, in a statement. "The net proceeds from this financing will provide our company with additional resources that should enable us to continue to expand our presence in Canadian and U.S. markets."

Based in Mississauga, Ont., Loretta Food Group is a food manufacturing holding company. It plans to use the proceeds for growth, brand positioning, marketing and working capital. Tremblant is a capital pool company.

Motient's stock remains up

Motient Corp.'s stock continued to make gains Wednesday, two days after it announced the closing of a $408.5 million private placement.

The company's stock closed up $0.57, or 2.45%, at $23.82. On Tuesday, the company's stock closed up $0.50 at $23.25.

After the closing was first announced Monday, the company's stock lost $2.25 to close at $22.75.

The company sold preferred shares at $1,000 each.

The preferreds are convertible into common shares at $33.33 each.

Motient, based in Lincolnshire, Ill., provides wireless data technologies to corporations.

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