Rodman & Renshaw (RODM) Enters $6.65M Debenture Private Placement; Stops Buyback Plan; Will Be Cash-Flow Positive in FY12

Rodman & Renshaw Capital Group, Inc. (Nasdaq: RODM) today announced that it has entered into definitive agreements to sell $6.65 million of 10% Convertible Secured Debentures due 2013, provided an investment banking outlook for the fourth quarter of 2011 and the first quarter of 2012, and disclosed certain cost reductions.

The company also announced it suspended its stock buyback plan.

Based upon the Company’s current expense structure giving effect to the cost savings initiatives described above, it is estimated that for Rodman to be cash-flow positive in 2012 it will need to generate approximately $43 million in investment banking cash revenue and approximately $30 million in brokerage revenue. Investment banking revenue for the first nine months of 2011 was approximately $50 million (approximately $41 million in cash and $9 million representing the value of warrants received) and our brokerage revenue since the Hudson acquisition is annualizing at an approximate $28 million run rate.

Investment Banking

• The Company has a strong pipeline of potential investment banking transactions. The Company is currently working on, or pursuing, over 50 potential transactions that may close, subject to market conditions, over the next five months which could generate up to $55 million of cash revenue. A total of 28 of these potential transactions are in the healthcare sector, 8 are in the oil & gas sector and 8 are in the metals & mining sector. The remaining potential transactions are in the technology, clean-tech, industrial and leisure sectors.
  
  
• In August 2011 we announced the Company’s role as financial advisor to Za Za Energy, LLC, a privately held oil and gas company based in Houston, in connection with its proposed acquisition of Toreador Resources Corporation (“Toreador”). On October 13, 2011, Toreador filed a preliminary proxy statement in connection with the transaction. The closing is expected to occur in December 2011. Upon closing, a significant M&A advisory fee is payable to the Company. This transaction further evidences the success of Rodman’s diversification initiatives.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Reitar Logtech launches $3M share repurchase program
• Cosmos Health posts 29% revenue rise in Q2 but net loss widens
• Ericsson repurchases 2.5 million shares in weekly buyback