Dubai-based asset management and investment banking firm, SHUAA Capital plans to set up three special purpose acquisition companies (SPACs), with a capital of $200 million each as it looks to tap into the growing market for blank-cheque companies.
SHUAA is currently in the early stages of research and negotiations with investment banks on the new initiative, it said in a statement to the Dubai Financial Market, where its shares trade. It did not give further details.
Last week, it was reported that SHUAA, which manages close to $14 billion in assets, had approached banks to set up three blank-check companies of around $200 million each to pursue deals in the energy, finance, and technology sectors.
A SPAC is a vehicle with no commercial operations that are formed with the intention of raising funds through an initial public offering (IPO) and then acquiring an existing company. SPACs have lighter disclosure requirements than IPOs and have been increasingly used over the past 18 months to take fast-growing companies public quickly.
The number and value of blank-cheque company IPOs slowed in the second quarter of 2021 after a boom in first-quarter listings, according to law firm Allen & Overy.
There were 79 SPAC listings during the three months to June that raised a total of $14.6 billion. This was 75 percent lower by volume and 85 percent lower by value than the 310 listings in the first quarter, which raised $95.5 billion. More was raised via SPACs in the first three months of this year than the $83 billion of SPAC proceeds from the whole of last year.
Earlier this year, Lucid Motors, which is backed by Saudi Arabia’s Public Investment Fund, announced that it would go public by merging with Churchill Capital IV Corporation SPAC while UAE-based Anghami said it would list on the Nasdaq through a merger with Vistas Media Acquisition Company in the second quarter.
The investment bank recorded a net profit of $6.81million for the three months to March 31, compared with a loss of $71.33 million in the same period last year, as net fee and commission income nearly doubled from $13.3 million to $26.3 million.
In 2019, SHUAA Capital merged with the Abu Dhabi Financial Group to create a business with both an asset management and investment banking platform that offers diversified revenue streams across different countries.