DiamondHead Holdings Corp. (NASDAQ:DHHC) announced this morning that it has added convertible note and PIPE financing that is expected to bring up to $155 million in new financing to its combination with Great Southern Homes.
The funding package is to be made up of 744,588 Class A shares purchased through the PIPE for an aggregate gross investment of $75 million and notes purchased at an initial principal amount of $80 million. These notes are to bear a 15% per annum interest rate and mature five years out from close.
Beginning on the first anniversary of the transaction’s closing, the notes are convertible to Class A shares at 80% of their trading price at the time for a maximum share price of $10 and a minimum of $5.
The changes come as DiamondHead rolls into its completion vote for the Great Southern Homes deal tomorrow, March 23. This special meeting was originally scheduled for March 14, but the SPAC rescheduled it likely to engage investors and seek out additional financing pieces like these it has now announced.
The $572 million combination, which the parties announced in September, carries a $125 million minimum cash condition, which would appear to be covered by this new investment.
Diamondhead did not initially include a PIPE in the transaction at announcement and its trust has been reduced to about $44.9 million through redemptions thus far.
Columbia, South Carolina-based Great Southern Homes is one of the largest homebuilders in the Southeast and focuses on the entry level home buyer segments. If approved, the combined company is expected to trade on the Nasdaq under the new ticker symbol “UHG”.
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