Raser Technologies raises US$23.8 million through direct offering

Alexander Richter 7 Jul 2009

Raser Technologies closed the sale of approximately US$25.5 million of its common stock and warrants in a registered direct offering. Net proceeds tare approximately US$23.8 million.

Released today, “Raser Technologies, Inc. (NYSE: RZ) announced that it closed its previously announced sale of approximately $25.5 million of its common stock and warrants in a registered direct offering. Net proceeds to the Company from the offering, after placement agent fees and offering expenses, are approximately $23.8 million.

Calyon Securities (USA) Inc. served as lead placement agent and RBC Capital Markets and JMP Securities LLC served as co-placement agents for the offering.

Raser CEO Brent M. Cook said, “We look at this as a compelling opportunity for Raser to move forward with its development plans, as we continue to work on several sources of funding for future power plants.”

Raser believes the proceeds from the registered direct offering, together with additional potential funding from strategic vendors and other partners, will allow the Company to obtain plant construction financing for the power projects it is currently developing. Raser recently announced that it had executed a term sheet with the Southern California Public Power Authority (“SCPPA”) for 110 megawatts (MW) of renewable geothermal power. The proposed agreement would provide for the sale to SCPPA municipalities of all of the power generated by the related power plants. SCPPA would also prepay a portion of the contracted rate to fund a portion of the costs necessary to construct the 110MW of capacity. Although the term sheet is nonbinding, Raser has had productive discussions with SCPPA and expects to finalize the terms in the near future. The company also announced that the Department of Energy (“DOE”) cleared Raser’s loan guarantee application to proceed to the next stage of due diligence. Raser intends to continue to pursue these types of funding sources as well as other sources for the construction of its planned power plants.

“In order to be in a position to obtain funding from these sources of capital for our projects, we need to provide a portion of the capital for the power plant development ourselves, primarily for well field development,” added Mr. Cook. “This direct offering, along with other strategic alliances are necessary to move the company forward. In an economy where very few are obtaining growth capital, the fact that Raser was able to complete this transaction demonstrates the confidence investors have in our business. Raser remains strategically positioned in two of the most exciting areas of our nation’s energy plans: green, renewable energy and more fuel-efficient transportation.”

Source: Company announcement via BusinessWire