U.S. private placement action improves; Gastar upsizes deal to $30 million

By Sheri Kasprzak

Atlanta, Oct. 22 - U.S private placement volume picked up as the week ended and the market saw a surge of companies upsizing previously announced deals.

"Earlier this week, I think some deals were struggling to price with the market, but I think it's slowly getting better," said one sell-side source. "I think that's one reason you're seeing a lot of companies upsizing their deals."

The biggest upsizing Friday came from Gastar, which bumped up its previously announced $20 million offering of 9.75% convertible senior unsecured debentures to $30 million.

"We believe that it was in Gastar's best interests to increase the size of the financing to better accommodate our anticipated future exploration and development drilling activities in East Texas and to increase our flexibility in advancing operations in all areas," said Gastar's president and chief executive officer J. Russell Porter in a statement.

The debentures have a term of five years and are convertible into shares at $4.62. The debentures are redeemable by Gastar any time after two years from the closing date at a price equal to par plus interest, assuming the volume weighted average trading price exceeds $6.03 for at least 20 trading days in a month.

Westwind Partners Inc. acted as placement agent in the deal.

Porter said in a recent interview the company planned to target mostly European and Canadian institutional investors.

"We have used private placements in the past successfully," Porter said. "The attraction of the private placement is the fact that the financing can possibly be accomplished much faster than a registered transaction."

Gastar is a Mt. Pleasant, Mich.-based natural gas exploration and production company. The company is traded on the Toronto Stock Exchange. Its stock closed up $0.30 at $4.95 Friday.

Expatriate finished upsized C$13.6 million deal

Expatriate Resources Inc. said Friday it finished an upsized C$13.6 million deal.

The company had announced Oct. 7 it planned to raise C$12 million in the offering.

The deal consists of 25 million flow-through shares at C$0.32 and 17,583,875 units of one common share and a half-share purchase warrant at C$0.32.

Each whole warrant, good for two years, allows the buyer to purchase a share at C$0.40 for the first year and C$0.45 for the second.

Expatriate said in a statement Friday it plans to close a second, C$3 million private placement in the coming days.

Expatriate is a base and precious metal exploration company based in Vancouver, B.C. The company plans to use C$11 million of the financing for exploration, feasibility study work and test mining of its Wolverine Project in the Yukon. The remaining funds will be used for other projects and general corporate purposes.

The company also plans to continue a reorganization it started Sept. 9. Its non-Finlayson District and Logan exploration properties will be transferred to a new exploration company - Pacifica Resources Ltd. - for shares that will be distributed, in part, to Expatriate shareholders. This arrangement is scheduled for completion in December.

Expatriate is also seeking approval to change its named to Yukon Zinc Corp. and will focus on the development of its Yukon zinc and silver projects.

Expatriate's stock closed unchanged at C$0.365 Friday.

Triex Minerals upsizes deal

Vancouver, B.C.-based exploration company Triex Minerals Corp. also upsized its recently announced C$2.6 million private placement to C$3 million.

On Oct. 19, the company announced its plans to enter the market with a C$2.6 million deal.

In the amended deal, Triex will issue up to 1.25 million flow-through shares at C$1.35 each and 1.05 million units at C$1.25.

The units consist of one common share and a half-share purchase warrant.

The whole warrants are exercisable for an additional share for two years at C$1.50 for the first year and C$1.75 for the second.

Triex plans to use the money from the financing for exploration at its Mountain Lake and Old Fort Bay properties and for future acquisitions. Its stock closed unchanged Thursday, its last trade, at C$1.23.

Peer 1 Network increases private placement

Peer 1 Network Enterprises also jumped on the upsizing bandwagon as it upsized to C$3 million a previously announced C$2 million deal. The company also has an option to sell an additional C$750,000.

In the deal, 7,864,737 units of one share and a half-share purchase warrant will be sold at C$0.38. A whole warrant entitles the buyer to a one share at C$0.38 for two years.

Peer 1 Network, based in Vancouver, B.C., is an internet bandwidth provider. It plans to use the proceeds from the financing for fees and integration costs for its acquisition of ServerBeach Ltd. The company will also use the money for capital expenses for expansion and general working capital.

Peer 1's stock closed Thursday, its last trade, at C$0.30.

Applied Digital sells $9 million

Applied Digital Solutions Inc. said Friday it sold $9 million in shares to Satellite Strategic Finance Associates LLC.

The company sold 2.5 million shares at $3.61, the average daily volume weighted-average market price of its stock from Oct. 13 to Oct. 19.

In the deal, SSFA received a series C warrant for 1.5 million shares at $4.33, exercisable for 150 days. SSFA also received a series D warrant for 666,667 shares at $5.05. The series D warrant is exercisable for six years.

Applied Digital Solutions is a security products company based in Delray Beach, Fla. The company plans to use the funds from the sale for its VeriChip technology.

Applied Digital's stock closed up $0.62 at $4.62 Friday.

IT&E gets $5 million convertible term note

IT&E International Group has sold $5 million in a secured convertible term note to Laurus Master Funds Ltd., the company said Friday.

The note, due Oct. 18, 2007, accrues interest at Prime plus 250 basis points. The note is convertible into shares at a conversion price of $0.75.

Laurus also received a warrant to buy up to 1.924 million shares. The exercise price for the first 962,000 shares is $0.94 and for the second 962,000 is $1.12. The warrant expires Oct. 18, 2011.

IT&E may issue Laurus an additional note of up to $2 million before July 15, 2005.

IT&E, headquartered in San Diego, life-science technology company. The company plans to use the funds from the financing to pay off existing debt and for working capital, but $2.5 million will be placed in a restricted cash account under an agreement between IT&E, Laurus and North Fork Bank.

IT&E's stock closed down $0.01 at $0.60 Friday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.