On Wednesday, Shuaa Capital, Dubai-based investment capital, declared the launch of a $100 million initial public offering (IPO) of its first planned special purpose acquisition companies (Spac) on Nasdaq New York.
The company listed 10 million units of Shuaa Partners Acquisition Corp I at a price of $10 per unit, and the Spac will start trading under the ticker symbol ‘SHUAU’ from March 2, Shuaa said in a statement to the Dubai Financial Market, where its shares trade.
Each unit issued in the IPO consists of one Class A ordinary share and one-half of a redeemable warrant, where each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 after the consummation of a business combination. Only whole warrants will be exercisable.
“Following Shuaa’s participation in the Anghami de-Spac transaction, we are excited to announce the launch of our own Spac vehicle, which will be focused on technology and/or tech-enabled financial services businesses based out of the Middle East, North Africa, and Turkey region,” said Fawad Khan, managing director, and head of investment banking at Shuaa and chief executive of Shuaa Partners Acquisition Corp I.
“We will be leveraging our Spac execution capabilities to find an exciting target and believe that Spacs will play a key role in enabling tech-enabled businesses across the Mena region to access affordable capital markets and fund their growth and expansion.”
A Spac is a vehicle with no commercial operations and is formed with the intention of raising funds through an IPO and then acquiring an existing company. Spacs have lighter disclosure requirements than IPOs and have been increasingly used over the past two years to take fast-growing companies public quickly.
The number of Spac listings grew 91 percent annually to a record 613 on Nasdaq last year, raising a total of $145 billion. Spacs also represented more than 59 percent of total new listings in the US IPO market last year, Nasdaq chief economist Phil Mackintosh said in a note in January.
On July 2, Shuaa announced plans to set up three Spacs with a capital of $200m each to tap into the opportunities in the sector.
It also participated in the recent listing of Arab music streaming platform Anghami on Nasdaq through a similar Spac transaction.
The listing of Shuaa’s Spac will target regional businesses that are “reaching high-growth stage and seeking to access highly liquid and affordable capital markets to fund their growth and geographic expansion”, the company said.
“Spacs listed on Nasdaq also provide ‘acquisition currency’, which is very important for technology and tech-enabled financial services businesses aiming to expand through acquisitions, where they are able to fund transactions through issuing shares listed on one of the world’s most liquid and recognized stock exchanges,” it added.
The businesses will also benefit from Shuaa’s direct access to capital providers through its network of institutional, family offices, and high-net-worth investors across the Mena region.
Shuaa, which has assets of nearly $14bn under management, reported a 68 percent drop in net profit last year as earnings were impacted due to one-off charges.
The company’s net profit slipped to Dh40m ($10.8m) due to one-off charges of Dh189m related to valuation impairments following the decision to accelerate the restructuring of a legacy, illiquid investment portfolio, it said.
Thus, it resulted in an annual increase of 11 percent in its operating income, valued at Dh394 million.
