Magellan amends investment terms; BPZ wraps $48 million stock deal; Cortex plans C$5 million unit sale

By Stephanie N. Rotondo

Portland, Ore., April 7 - Magellan Petroleum Inc. announced amended terms for a previously announced $10 million equity investment on Tuesday.

The company adjusted the warrant strike price, as well as the deadline for completion of the deal. A top executive called the deal a "transfer of ownership" from one shareholder to another.

Meanwhile, BPZ Resources Inc. completed the final tranche of its $48 million private placement. In the last part of the deal, the company sold $4.4 million of stock to one investor.

Cortex Business Solutions Inc. is planning to further its business expansion program with proceeds from its C$5 million placement of units. Closing of the deal, in total or in part, is expected by the end of the month.

Western Lithium Canada Corp. is aiming to raise C$4.03 million via a private placement of units. Also, Starpharma Holdings Ltd. is planning a stock sale valued between A$4.3 million and A$4.6 million.

Magellan amends investment terms

Magellan Petroleum announced amended terms of a $10 million strategic investment on Tuesday.

Under the agreement with Young Energy Prize SP, YEP will purchase approximately 8.7 million common shares of stock at $1.15 per share. YEP will also receive five-year warrants good for 4.3 million additional shares, with an exercise price of $1.20 per share.

Also, the deadline for the completion of the deal was extended to June 30 from April 30.

YEP also will purchase existing shares from ANS investments LLC and its chief executive officer, Jonah M. Meer. YEP will buy 568,985 shares at $1.15 per share.

Furthermore, upon completion of that part of the deal, the original warrant strike price will be reduced to $1.15.

William Hastings, Magellan's president and chief executive officer, said that the strike price was adjusted "rather than issue new warrants."

"We're excited we got all this behind us so we can focus on improving the company," he told Prospect News.

Hastings called the deal a "transfer of ownership from one shareholder to another." ANS, along with Meer, had previously planned a contested proxy. This transaction effectively ends that fight, Hastings explained.

"Mr. Meer will continue to hold some shares and will support us in our proxy effort," he added.

"We're trying to build the company into something bigger," he continued. "That's our final goal in all this, to become a more substantive natural gas company."

Magellan's stock (Nasdaq: MPET) gained 2 pennies, or 2.90%, to $0.71. Market capitalization is $31.1 million.

Magellan Petroleum is a Hartford, Conn.-based oil and gas company.

BPZ wraps $48 million placement

BPZ Resources completed the final tranche of its $48 million private placement of stock, according to a press release.

The Houston-based company issued a total of approximately 14.3 million shares at $3.05 per share. In the final tranche, 1.4 million shares were sold to International Finance Corp. for $4.4 million.

"IFC's support is important as they are our largest shareholder and have done extensive due diligence on the company," said Manolo Zuņiga, BPZ's president and CEO, in the statement. "Their participation provides additional funds to continue appraising Corvina and redeveloping Albacora, as well as signaling a vote of confidence to our shareholders."

BPZ's equity (AMEX: BPZ) dropped 23 cents, or 5.44%, to $4.00. Market capitalization is $375 million.

BPZ Resources is an oil and gas production and exploration company.

Cortex aims for C$5 million

Cortex Business Solutions arranged a C$5 million private placement of units, the company said.

The Calgary, Alta.-based company plans to issue 25 million units consisting of one common share and one half-share warrant for C$0.20 per unit. Whole four-year warrants are exercisable at C$0.30 for the first two years and at C$0.45 for the last two years.

Ryan Lailey, vice president of business development and corporate strategy, told Prospect News that the terms of the deal were similar to a financing done a year ago and the price per share represented a premium over Monday's closing price.

"Given what has happened in the markets, we're pretty happy we were able to raise similar financing as a year ago," he said.

He said that the decision to do a private placement over other avenues of financing was simply because it was a "cleaner, easier way to get it done."

"For the debt side, debt issuance in this marketplace is pretty tough to do," he said, especially for small cap companies.

Proceeds from the deal will be used to accelerate Cortex's network expansion program and for general working capital.

Lailey added that the closing of the deal is expected by the end of the month, noting that the agreement includes an option for the deal to be tranched.

"The private placement can be open as long as 90 days," he explained. "But we don't anticipate it taking that long."

Cortex's stock (TSX Venture: CBX) declined 1.5 cents, or 8.33%, to C$0.165.

Western Lithium to issue units

Western Lithium Canada, a lithium resource company, plans to raise C$4.03 million via a private placement of units, according to a press release.

The Vancouver, B.C.-based company will sell 6.2 million units containing one common share and one half-share warrant for C$0.65 per unit. Whole warrants are exercisable for one year at C$0.80.

Additionally, there is an over-allotment option of C$1.04 million.

Proceeds will be used in part to fund engineering and development studies at the company's lithium project in Nevada.

"Western Lithium is developing the Kings Valley, Nev. lithium deposit into potentially one of the world's largest strategic, scalable and reliable sources of battery grade lithium carbonate," the press release stated. "The company is positioning itself as a U.S.-based supplier to support the rising global demand for lithium carbonate that is expected from the increased use of mobile electronics and hybrid/electric vehicles."

Settlement is expected April 30.

Western Lithium's equity (TSX Venture: WLC) fell a nickel, or 7.25%, to C$0.64.

Starpharma plans stock sale

Starpharma Holdings negotiated a private placement of stock valued between A$4.3 million and A$4.6 million.

Under the terms of the two-tranche deal, Starpharma will issue approximately 11.8 million ordinary shares at A$0.26, totaling A$3.1 million, in the first tranche. The second tranche - expected to close in May - is expected to bring in between A$1.2 million and A$1.5 million. The share price for the second tranche will equal the lesser of A$0.26 per share and the volume-weighted average price per share over the five trading days prior to the deal's closing.

Furthermore, the company is planning a share purchase plan priced at A$0.26.

The placement, led by Acorn Capital, "will boost the company's cash reserves to over A$10 million," the release said.

"We are delighted with the support of existing shareholders and new institutional shareholders in this placement," said Dr Jackie Fairley, CEO of Starpharma, in the statement. "This reflects a growing confidence in the commercial prospects for the VivaGel condom coating deal with SSL, the VivaGel standalone product, and our broader product pipeline. We also appreciate the continued support of all shareholders, and will provide an opportunity for wider participation in the capital raising via a share purchase plan.

"Over the past 12 months Starpharma has worked hard to reduce its cash burn, and these initiatives, together with this new capital and our increasing commercial revenue streams, position Starpharma extremely well as we advance the VivaGel(r) coated condom and other products to market," Fairley continued.

Starpharma's stock (Australia: SPL) closed at A$0.27.

Starpharma is a Melbourne, Australia-based biotechnology company.

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