China Automotive plans $35 million deal; Noront Resources raising C$26 million

By Sara Rosenberg

New York, Feb. 4 - In some of the larger PIPE deals of the day, China Automotive Systems, Inc. revealed plans for a $35 million private placement and Noront Resources Ltd. plans to do a C$26 million private placement.

China Automotive Systems signed an agreement with two institutional investors under which the it will sell $35 million of five-year senior convertible notes and one-year warrants in a private placement.

The notes will be initially convertible into 3,953,596 common shares at $8.8527 per share and the warrants will be exercisable for 1,317,865 common shares at an initial exercise price of $8.8527 per share.

The unsecured notes will bear interest at an annual rate increasing over time from 3% to 5%. If the notes are redeemed, the company must make an additional make-whole payment which, together with interest already paid, will equal a coupon of up to 13%. The notes' conversion price will be subject to reset every six months, but subject to a $7.0822 floor.

Proceeds will be used for acquisitions, capital expenditures and working capital.

"This private placement will provide the financing to accelerate our acquisition program and purchase additional equipment to expand our production capacity. We are experiencing growing demand for our power steering products and systems as we already supply over 50 automotive manufacturers in China and started receiving more and more inquiries from overseas," said Qizhou Wu, chief executive officer, in a company news release.

"Additionally, these funds will help us strengthen our North America operation and develop the next-generation steering products which will help propel our plan to become a global supplier to major automobile manufacturers," Qizhou continued.

"We are very excited to receive funding from highly-regarded investment groups as cornerstone investors. Our growth strategy, proven record, strong execution and commitment from the management team boost our investors' confidence in participating in our quest to expand in the power steering market. We look forward to fully utilizing the fresh capital to extend our leadership in China and broaden our global market coverage," added Jie Li, chief financial officer, in the release.

Settlement is expected Feb. 13.

The company's stock closed at $6.90, up $0.14, or 2.07% (Nasdaq: CAAS).

China Automotive is a Jingzhou City, China-based power steering components and systems supplier.

Noront plans C$26 million offering

Noront Resources said on Monday that it will conduct a C$26 million private placement of units, under which it will sell 6.5 million units at C$4.00 apiece.

Each unit consists of one common and one half-share warrant. The whole warrants are exercisable at C$5.00 for two years.

The warrants may expire sooner if the company's shares close at C$6.00 or higher for ten consecutive trading days. In that case, the warrants will expire within 30 days.

IBK Capital Corp. will be the agent.

Proceeds will be used will be for exploration.

"This placement will permit Noront to accelerate the exploration and definition of its very attractive nickel-copper-platinum-palladium discovery in the James Bay Lowlands," said Richard Nemis, president and chief executive officer, in a company news release.

The company's stock closed at $4.49, up $0.03, or 0.67% (CDNX: NOT).

Noront Resources is a Toronto-based gold exploration company.

GLR needs PIPE for timely ice road crossing

GLR Resources Inc. opted to do a C$4 million private placement because it needed the funds quickly, a company spokesman told Prospect News on Monday.

Proceeds from the offering will be used to finance the transportation of construction materials to the Goldfields Project mine.

The spokesman explained that in order to transport the materials to the mine, the trucks need to cross over a frozen lake - an "ice road" - and that lake won't be frozen enough to cross for much longer.

As a result, the company decided to do this private placement so that the materials could be transported in time.

GLR already has $60 million in financing for the construction of the mine from banks, but this financing still has to go through due diligence and documentation, which is why the company couldn't wait to get these funds before transporting the construction materials.

Of that $60 million, $45 million is coming from Investec Bank Ltd. comprising of a $40 million term loan and a $5 million convertible loan facility.

GLR's C$4 million private placement of flow-through shares and units was announced last week.

The company plans to sell up to 5 million units of one share and one warrant at C$0.40 per unit for C$2 million.

Each warrant will be exercisable at C$0.60 for two years.

The company also will sell 4 million flow-through shares at C$0.50 per share for C$2 million.

Settlement is expected on Feb. 14.

The company's stock closed at $0.43, down $0.01, or 2.27% (Toronto: GRS).

GLR is a Kirkland Lake, Ont., resource exploration company.

The company's Goldfields Project, located near Uranium City in northern Saskatchewan, consists of two open-pitable Gold deposits - The Box and The Athona - containing a resource in excess of one million ounces Gold. GLR is focused on bringing the Goldfields project into production in early 2009.

Wavefront wraps deal

Wavefront Energy and Environmental Services Inc. completed its private placement of 9,641,052 units at a price of C$0.95 each, for gross proceeds of approximately C$9.16 million.

Each unit consists of one common share and one half-share warrant. Each whole warrant will be exercisable at C$1.25 for one year.

The deal was conducted on the same terms as a previous C$4.74 million placement, which settled on Dec. 24.

Proceeds will be used to initiate the manufacturing of an inventory of Powerwave and Primawave systems for field wide implementation, with the remainder to be set aside for unallocated working capital.

"The board and management remain very confident in our strategic plan and the industry altering benefits that our technology provides the energy and environmental sectors," said Steve Percy, chairman, in a company news release.

"Wavefront continues to see positive uptake in the use of Powerwave and Primawave and expects greater advancements moving forward as the marketplace comes to understand the technical and financial impacts these products bear on oil recovery and groundwater cleanup and remediation," Percy added.

The company's stock closed at $1.00, up $0.13, or 14.94% (CDNX: WEE).

Wavefront is an Edmonton, Alta.-based developer of technologies used by oil and natural gas exploration and development companies.

Proventec sets private placement

Proventec plc arranged a £4.06 million private placement of 8.5% fixed-rate guaranteed unsecured convertible loan notes due Dec. 31, 2012 that will be convertible into ordinary shares at 14p per share.

Proceeds will be used to facilitate an increase in production of steam cleaning equipment, to add to the company's cash reserves for working capital purposes and to provide a fund to facilitate the company's acquisition strategy.

"Following the award of the NHS tender for Osprey DeepClean to be the sole provider of specialist steam cleaning to U.K. hospitals, and through the full integration of acquisitions made during 2007, we have seen a significant upturn in business. We have also identified a number of complementary acquisition targets and the money raised will provide us with the flexibility to be able to expand the business further," said David Chestnutt, chief executive, in a company news release.

The company's stock closed at £8.42, up 25p, or 3.06% (LSE: PROV).

Proventec is a Liverpool, England-based provider of steam cleaning and preventative coatings technologies.

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