China North East Petroleum plans 4M stock offering

China North East Petroleum Holdings plans to raise about $18.4M from 4M stock offering

• On 1:40 pm EDT, Wednesday September 16, 2009

NEW YORK (AP) -- China North East Petroleum Holdings Ltd. said Wednesday that it plans to raise about $18.4 million in gross proceeds from an offering of 4 million shares of its common stock.

The offering will be priced at $4.60 per share, according to the Chinese oil production company. That represents a discount of 8.5 percent from its closing price Tuesday. It plans to use net proceeds to finance its expansion plan and for general working capital purposes.

Investors will also receive warrants to buy 800,000 shares of common stock, with an exercise price of $6 per share. The warrants are exercisable beginning six months after the transaction's closing.

The offering is targeted to close on Friday.

As of Aug. 7, the company had roughly 21 million shares outstanding, according to a filing with the Securities and Exchange Commission.

Shares of China North East Petroleum Holdings fell 37 cents, or 7.4 percent, to $4.66 in afternoon trading. Over the past year, the stock has traded in a range of $1.25 to $6.50.