Digital World Acquisition, which has a merger agreement with former U.S. President Donald Trump’s social media company, is nearing a $50 million financing deal, Reuters reports, citing people familiar with the matter.
The deal, which could be announced in the next few days, is based on convertible notes and will help fund DWAC while it tries to complete its merger with Trump Media & Technology Group (TMTG), owner of social media platform Truth Social, the sources said.
The SPAC filed an 8-K outlining the potential deal. The notes bear 8% annual interest, but the sweet part of the deal is a conversion price of $8 for a unit. Digital World is trading at about $45 so the convertible notes represent greater than a 500% return for the participating investors. The notes are convertible at any time following the closing of the SPAC’s merger with Trump Media.
Digital World has also agreed to issue 3,050,000 warrants, each good for a share at $11.50, to its institutional investors. This is more favorable than the SPAC’s IPO units, which consisted of a share and half a warrant, however, the new institutional warrants could only be transferred to the investor’s affiliates.
Investment firms Anson Funds, All Blue Capital and Mangrove Partners have offered to buy the convertible notes on offer, the sources added, cautioning that the timing and composition of the deal may still change.
Digital World and TMTG have until September to complete the deal. Read more.
