STOCK ADX NEW   Abu Dhabi Securities Exchange
Abu Dhabi recently came out with the regulatory framework that would lead to the listing of SPACs, and making it the first in the region. Image Credit: Supplied

Dubai: Abu Dhabi has its own SPAC, the first such investment vehicle to be launched in the UAE. The investment company ADQ and Chimera Investments have launched ‘ADC Acquisition Corporation’ (ADC), which will operate as a Special Purpose Acquisition Company.

ADQ plans to raise Dh367 million through an IPO, of 36.7 million shares at Dh10 each. Shares will be sold to 'qualified' retail and professional investors in a public subscription and listed on the Abu Dhabi Securities Exchange (ADX).

ADC will be the vehicle that ADQ and Chimera will use to identify and combine one or more businesses. ADC will identify ‘scalable businesses with strong management teams’. The launch of ADC will offer target businesses an opportunity to access capital in Abu Dhabi’s capital markets 'through a faster, less expensive alternative to the traditional IPO method'. These companies will also 'benefit from access to the extensive, multi-sector expertise and combined network' from ADQ and Chimera Investments.

Through ADC, we are creating a desirable investment structure in the UAE that is well-positioned to identify and consolidate target companies through a differentiated approach, providing private companies a new route to funding from public markets

- Mohamed Hassan Alsuwaidi, Managing Director and CEO of ADQ and Chairman of ADC

ADX shows the way

ADX was the first market in the region to introduce listing rules for SPACs, which was issued by the UAE’s Securities and Commodities Authority (SCA) in February. The listing of ADC follows a strong performance for ADX in the first quarter of 2022, which was the biggest gainer among the Middle East's stock exchanges.

The ADX market cap reached nearly Dh1.9 trillion at the end of March, up 117.1 per cent from a year ago. Liquidity also increased with value of shares traded at 101.0 billion and total volume at 15.6 billion shares, which grew by 87.4 per cent and 49.7 per cent from Q1-2021.

SPACs make it to the UAE
SPACs have turned out to be an extremely popular route for companies to go public – but without having to go through the rigours associated with a standard IPO. A special purpose vehicle – in the form of a company – can raise funds from the public and can be used to go in for a M&A with an existing company. In the UAE, the music streaming portal Anghami listed on Nasdaq New York after a SPAC deal.