Shares of Irvine-based Standard Pacific Corp. closed up more than 45% Tuesday after the homebuilder announced it struck a deal for $530 million in funding from a New York private equity fund.
MatlinPatterson Global Advisers LLC said it would buy about $381 million of debt that converts to 125 million Standard Pacific shares.
MatlinPatterson is paying 37% more than the closing price of Standard Pacific’s stock before the deal was announced.
The investor also plans to exchange roughly $128.5 million of the company’s debt for warrants to buy preferred stock, representing 89.4 million shares of common stock.
A subsequent offering for another 50 million shares of common stock could boost the hedge fund’s total investment in Standard Pacific to more than $530 million.
Standard Pacific’s stock surged on the news with a market value of about $240 million.
“This capital infusion will strengthen our balance sheet, enhance our financial flexibility and provide funding for future growth opportunities,” said Jeffrey Peterson, Standard Pacific’s chief executive, in a statement.
Peterson, who took over the top spot of the struggling homebuilder in March, will remain as chairman and chief executive following the investment, the companies said.
As part of the deal MatlinPatterson will get three seats on Standard Pacific’s board, which is being increased to 11 members.
