Flagstar boosts capital; Luxell closes placement; Qiao Xing sells debt for stock; Midway plans placement

By Kenneth Lim

Boston, May 16 - Flagstar Bancorp Inc. said it is boosting its capital position to a historic high with a $100.01 million fundraising exercise.

Luxell Technologies Inc. said it completed its planned C$6.19 million non-brokered private placement of units to cap its turnaround efforts.

Qiao Xing Mobile Communication Co., Ltd. said its $70 million convertible note placement allowed it to take on cheaper-rate debt while buying back stock.

Midway Gold Corp. said it plans to raise C$13 million in a private stock placement.

Flagstar boosts balance sheet

Flagstar said it is selling $100.01 million of common shares and 5% mandatory convertible preferred stock to raise its regulatory capital position.

Flagstar will sell 11.4 million common shares at $4.25 each to seven institutional investors for $48.3 million. It will sell another 635,000 common shares at $5.88 apiece to chairman Thomas J. Hammond and vice chairman, president and chief executive Mark T. Hammond for $3.73 million.

The company will also sell about $48 million of the convertible preferreds at par of $1,000 each. After the company receives shareholder approval, the preferreds will automatically convert into common stock at an initial conversion price of $4.25 per share.

Flagstar common stock (NYSE: FBC) closed at $4.85 on Friday, lower by 18.49%, or $1.10.

Lehman Brothers is the agent.

Flagstar is a Troy, Mich.-based savings and loan holding company.

"Until such time as the capital markets normalize and the residential real estate market shows signs of improvement, we plan to operate at capital levels that are higher than our historic norms," Mark Hammond said in a statement. "We believe that the structure of this transaction strikes a prudent balance between raising additional capital in accordance with our plan and limiting the amount of dilution to existing shareholders."

Luxell raises for turnaround

Luxell Technologies said it closed a C$6.19 million non-brokered private placement of units.

The deal was announced on March 5 and priced for C$6 million on March 31.

Luxell sold 61.9 million units of one share and one half-share warrant at C$0.10 per unit. The company had planned to sell 60 million units.

Each whole warrant is exercisable at C$0.25 for two years. The warrants may expire sooner if Luxell's shares close at C$0.35 or higher for ten consecutive trading days. In that case, the warrants will expire 30 days after the company notifies holders.

Luxell common stock (TSX: LUX) closed unchanged at C$0.11 on Friday.

Luxell, a Toronto-based company that develops flat-panel display technology, said it will use proceeds for working capital and sales growth, to retire debt and for general corporate purposes.

"This represents a major step toward our final and successful turnaround," Luxell chief executive Jean Louis Larmor said in a statement. "All of the parties surrounding Luxell have worked extremely hard to reach this remarkable achievement. Luxell has an excellent team of management and employees, a very active and involved group of directors, and an excellent product base that is now exceptionally well positioned for our key market segments. As we move forward to further strengthening our financial basis, we believe Luxell will continue to grow and be well poised for an extended period of high performance."

Qiao Xing raises $70 million

Qiao Xing Mobile said it is selling $70 million of convertible notes with warrants to two institutional investors.

The deal involves three-year 4% senior convertible notes and warrants. The investors will pay for the notes with a combination of about $48.3 million in Qiao Xing shares, which are owned by the investors, and cash. All shares submitted in exchange for the notes will be canceled.

Qiao Xing common stock (NYSE: QXM) gained 0.94%, or $0.07, to close at $7.52 on Friday.

Qiao Xing, a Beijing-based maker of mobile handsets, said it will use the proceeds for general corporate purposes, including funding potential ventures that the company is evaluating.

"We believe that this is a good opportunity for us to use our strong balance sheet to take on borrowings that offer low interest rates, as well as to take advantage of our current low trading price to buy back some of our outstanding shares," Qiao Xing chairman Wu Zhi Yang said in a press release.

Midway Gold to raise C$13 million

Midway Gold said it plans to sell 6.5 million common shares at C$2.00 apiece to raise C$13 million.

The company may increase the size of the placement by an additional 15%.

Midway common stock (TSX: MDW) slipped 2.5%, or C$0.05, to close at C$1.95 on Friday.

Midway, a White Rock, B.C.-based precious metals exploration company, said it will use the proceeds to fund its ongoing exploration and drilling programs.

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