Metretek Taps Investors for $14M

Denver-based energy measurement products provider Metretek Technologies Inc. will fund its entrance into e-commerce with the proceeds of a $14 million private placement of equity units, according to a Securities and Exchange Commission filing.

The company intends to be the leading Internet provider of energy information products and services through its newly formed subsidiary, PowerSpring Inc.

The b-to-b Web site, which Scient Corp. is assisting the company in developing, will provide commercial users of natural gas comprehensive energy consumption data designed to facilitate their purchase and management of natural gas.

The company estimates, according to the filing, that the initial development phase of its e business will require expenditures between $5 million and $7 million and that it will launch its Web site in the second quarter of this year.

First Albany Corp. acted as exclusive placement agent and received a fee of 2% of the gross proceeds in cash and four-year warrants to purchase 30,000 shares of common stock at an exercise price of $14.50 per share.

The private placement consisted of 1,450 units closing last December and 5,550 units placed earlier this month.

Each $2,000 unit consists of 200 shares of common stock, one share of Series B preferred stock and warrants to purchase 100 shares of common stock.

The preferred stock carries an annual dividend of 8% payable in cash.

The warrants are exercisable into 700,000 shares of common stock at an initial exercise price of $6.7425 per share. The price will be reset on Dec. 9, 2000, to 125% of the average closing price of the common stock for the 30 trading days prior to exercise.

DDJ Capital Management LLC was the lead investor purchasing 3,000 units.

Other investors included Special Situations Fund III LP, Special Situations Private Equity Fund LP, Special Situations Technology Fund LP, Special Situations Cayman Fund LP, and SEI Institutional Management Trust, as well as several individuals.

The company also used $2.1 million of the private placement proceeds to repay existing debt.