U.S. private placements fall flat; Tusk Energy plans C$31.5 million offering

By Sheri Kasprzak

Atlanta, Feb. 24 - Despite making gains late in the day, lower stocks for the majority of Thursday kept private placement volume in the United States down.

Better oil prices and a solid gold market, however, gave a boost to some Canadian energy and gold companies, sell-side sources there said.

"I think this is a trend, especially for gold, that we can expect to see for at least the short term," said one market source. "Oil was higher and that was good for some energy issuers."

Some gold companies took advantage of a strong market to get deals into the hopper. Virginia Gold Mines Inc. put a C$12.01 million offering on the table, Genco Resources announced a C$4.3 million deal and RNC Gold Inc. said it plans to raise C$5.5 million in the private placement market.

Oil gained $0.22 to end at $51.39 per barrel.

And while oil made gains, U.S. stocks were pushed down for the majority of the day. Even so, stocks made a comeback by the closing bell.

The Dow Jones Industrial Average closed up 75 at 10,748.79; the Nasdaq composite index ended up 20.45 to close at 2,051.70 and the S&P 500 gained 9.40 to close at 1,200.20.

Heading up private placement news Thursday, Tusk Energy Corp. announced its intentions to raise C$31.5 million in a private placement.

The offering includes 7 million shares at C$4.50 each through a syndicate of underwriters led by Orion Securities Inc.

"It looks to me like it's being well received by the market," said one sell-side source who had seen the deal. "Very small discount, maybe 3%, so it's attractive to investors and I think it will go really well for them [Tusk]."

Tusk is a Calgary, Alta.-based oil and natural gas exploration, development and production company. It plans to use the proceeds for working capital and expanded capital expenditures.

On Thursday, Tusk's stock closed up C$0.30 at C$4.95.

Integrated raises additional $14 million

Holders of Integrated Electrical Services, Inc.'s $36 million in senior convertible notes have exercised their right to purchase an additional $14 million.

The notes bear interest at 6.5% annually, mature Nov. 1, 2014 and are convertible into common shares at $3.25 each.

The original offering for $36 million closed Nov. 22.

"We are very pleased to announce this additional investment in IES with the approval of our shareholders and appreciate the support evidenced by this additional investment," said the company's chief executive officer Roddy Allen in a statement.

"The proceeds from this placement were used to reduce our bank debt, completely paying down the last of our term loan, which originally totaled $50 million."

Houston-based Integrated Electrical is an electrical contracting and maintenance company. The company plans to use the proceeds from the additional notes to reduce its bank debt.

Integrated's stock ended the day up $0.09 at $3.35 on Thursday.

BioBalance closes $4.9 million deal

New York Health Care, Inc. subsidiary The BioBalance Corp. finished a private placement for $4,898,000.

The company issued 7.9 million shares at $0.62 each to institutional and accredited investors.

The investors also received warrants for up to 3.9 million additional shares at $0.78 each.

Sterling Financial Investment Group was the placement agent.

"We are obviously pleased with the success of this financing and the confidence of the investor community in our platform technology," said Dennis O'Donnell, New York Health's chief executive officer, in a statement. "These funds will allow us to proceed with clinical development of Probactrix as a prescription drug."

Based in New York, BioBalance is a pharmaceutical company focused on treatments for gastrointestinal disorders. The proceeds from the offering will be used to support research and development and clinical trials. The remainder will be used for working capital.

BioBalance's stock closed up $0.03 at $0.88 Thursday.

World Waste raises $2 million

World Waste Technologies, Inc. wrapped up a $2 million private placement offering, the company said.

The offering included 800,000 units at $2.50 each, sold to one institutional investor.

The units consist of one share and one quarter-share warrant. The whole warrants allow for an additional share at $0.01 each for five years.

"We are making significant progress in the construction of our first facility," said World Waste's chief executive officer Thomas Collins in a statement. "Although we still need to raise a significant amount of additional capital, this new funding is an important piece in our ongoing efforts to raise the funds to complete this facility."

Based in San Diego, World Waste is a waste recycling and pulp manufacturing company. It plans to use the proceeds from the private placement to complete the construction of its first facility.

World Waste closed down $0.20 at $3.30 on Thursday.

Level 3 continues to gain

A couple of days after announcing its intentions to raise $880 million in a direct placement of convertible senior notes, Level 3 Communications Inc.'s stock remained higher Thursday.

At the end of the day, Level 3 was up $0.08 to close at $2.44 and gained another $0.02 in after-hours trading. On Wednesday, a day after the deal was announced, the shares ended up $0.08 at $2.36 and on Tuesday, the stock gained $0.35 to end at $2.28.

The notes being offered in the deal are convertible into common shares at $3.60 each.

Based in Broomfield, Colo., Level 3 is a communications and information services company providing wholesale dial-up service to internet service providers.

Bankers' stock up

After announcing a C$35.65 million private placement on Wednesday, Bankers Petroleum Ltd. continued to make gains Thursday.

On Thursday, the company ended the day up C$0.28 at C$1.50 after closing up C$0.11 at C$1.22 on Wednesday.

The company plans to sell 31 million shares at C$1.15 each.

Based in Calgary, Alta., Bankers is an oil and gas exploration company.

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