UAE regulator approves Gulf's first SPAC framework

Anghami

24/01/2022 07:30

DUBAI, Jan 24 (Reuters) - The United Arab Emirates'
Securities and Commodities Authority (SCA) has approved a
regulatory framework for special purpose acquisition companies
(SPACs), the first in the Gulf, the Abu Dhabi Media Office said
on Monday.
    The regulation also allows sponsors abroad to apply for
approval to list their SPACs on the Abu Dhabi Securities
Exchange (ADX), the office said.
    ADX in a separate statement said the move would pave the way
for its first SPAC listing this year.
    A dealmaking instrument that is taking off in Asia https://www.reuters.com/markets/europe/singapore-makes-bold-foray-into-spac-market-temasek-backed-firm-lists-thursday-2022-01-19
 though it has shed popularity in the United States after an
initial boom https://www.reuters.com/markets/europe/spac-boom-fizzles-investors-cash-out-big-names-2021-12-17,
 SPACs raise money to acquire a private firm with the purpose of
taking it public, allowing the target to list more quickly on
share markets than via traditional initial public offerings.
    The framework's approval comes amid a simmering economic
rivalry between Abu Dhabi and Saudi Arabia. Dubai, the UAE's
tourism and commerce hub, is racing to resuscitate its stock
exchange, as bigger bourses like ADX and Riyadh's Tadawul
attract larger listings and strong liquidity.
    "Benchmarked and assessed against best-in-class U.S. and
international SPAC regulations, the robust framework will
provide international investors with access to unique growth
opportunities," ADX said. The exchange said the framework was
developed by ADX and Abu Dhabi's Department of Economic
Development, as well as SCA and "investment specialists".
    "Sponsors will be required to raise a minimum of AED 100
million ($27 million) in the Initial Public Offering (IPO) and
units sold will comprise warrants that give investors and
sponsors the right to convert them into shares," the exchange
said. SPACs must place 90% of IPO proceeds in an account bearing
no interest, it said. 
    Shareholders in Nasdaq-listed SPAC Vistas Media Acquisition
Company Inc  VMAC.O  last week approved a merger with Abu
Dhabi-headquartered Anghami, a Spotify rival in the Middle East.
Anghami last year said the SPAC merger would make it the first
tech company from the region to list on Nasdaq.
    The merger will complete after closing conditions are met,
after which the combined entity's common stock will begin
trading under the ticker ANGH.

($1 = 3.6726 UAE dirham)

 (Reporting by Yousef Saba; Editing by Kenneth Maxwell)
 ((Yousef.Saba@thomsonreuters.com; +971562166204; https://twitter.com/YousefSaba))