Dubai: The UAE’s first SPAC (Special Purpose Acquisition Company) will launch its public offer on May 12, offering 36.7 million shares at Dh10 apiece. The offer period for newly created ADC Acquisition Corporation will run until May 19, and subsequently list on ADX.
The offering represents 80 per cent of the issued share capital in ADC. (In addition, there will be 18.35 million ‘public warrants’ that will be issued. One public warrant equates to shares subscribed to by an investor.)
Recently, Abu Dhabi became the first in the region to create a regulatory framework for SPACs, which over the last two years had become quite popular in getting companies to go public, but without the many processes associated with a traditional IPO. SPACs use the funds generated to acquire an existing company. (The most high-profile SPAC investment was the acquisition of the Arabic music streaming platform Anghami and followed by its listing on Nasdaq New York.)
ADC, as of now, has made no buys. ‘The Company (was) formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities,” the prospectus says.
ADC’s founders are Chimera Investment and Alpha Oryx, who will hold on 20 per cent of the issued share capital after the listing. The Chairman of ADC is Mohamed Hssan Al Suwaidi, while Seif Fikry is CEO and Executive Director.
Chimera Investment is part of Abu Dhabi’s Royal Group, which has exposures in multiple sectors. It was in April that Chimera confirmed the SPAC plans in alliance with Alpha Oryx, itself part of ADQ.
On listing, ADC’s share capital will be Dh114.68 million, split over 36.7 million Class A shares and 9.17 million Class B ones. The nominal value of each Class A and Class B share is Dh2.5 each.
• Retail investors can subscribe to 3.67 million Class A shares, representing 10 per cent of the offer. They must have a bank account and hold a NIN (National Investor Number) with ADX. The minimum subscription for a retail investor is Dh20,000 and at increments of Dh1,000 thereafter.
• Professional investors get to subscribe to 33.03 million Class A shares, representing 90 per cent of the offer. These include financial institutions, central banks, capital market institutions, etc. The minimum subscription for this lot is Dh10 million and in increments of Dh1 million thereafter.
Allocations to both sets of investors will be done on May 21. Refunds from any over-subscription is set for May 26.
Record haul in 2021
There were 613 SPAC listings last year against 248 a year before. More capital markets outside of the US are thinking of creating conditions that would lead to such listings in their own jurisdictions. This is exactly what Abu Dhabi has done with the rollout of its SPAC-specific regulations.