Shuaa Capital to set up three Spacs with capital of $200m each

Dubai-listed company is in early talks with investment banks on the new blank-cheque vehicle initiative

Dubai-based investment bank Shuaa Capital plans to set up three special purpose acquisition companies. Jaime Puebla / The National

Dubai-based investment bank Shuaa Capital plans to set up three special purpose acquisition companies, or Spacs, with 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 on Sunday, where its shares trade. It did not give further details.

A Spac is a vehicle with no commercial operations that is 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 per cent lower by volume and 85 per cent lower by value than the 310 listings in the first quarter, which raised $95.5bn.

More was raised via Spacs in the first three months of this year than the $83bn 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 music-streaming service Anghami said it would list on the Nasdaq through a merger with Vistas Media Acquisition Company in the second quarter. Both companies are yet to make their market debut.

Shuaa, which has assets under management worth $14bn, led the funding round for Anghami late last year.

The investment bank recorded a net profit of Dh25m ($6.81m) for the three months to March 31, compared with a loss of Dh262m in the same period last year, as net fee and commission income nearly doubled from Dh49.2m to Dh96.9m.

Shuaa Capital merged with the Abu Dhabi Financial Group two years ago to create a business with both an asset management and investment banking platform that offers diversified revenue streams across different countries.