Want to Set Up a SPAC? Here’s What You Need to Know👇
The FRA issued the rules and regulations for investors looking to establish local special purpose acquisition companies (SPAC). For a refresher on SPACs click here.
Steps to setting up your first SPAC🤩 Your soon-to-be SPAC must first start out as a licensed Venture Capital firm, with a minimum issued capital of EGP 10 million.
Where do I get EGP 10 million?🙃 Investors. In the case of SPACs, they’re called sponsors. Once the minimum capital requirement is met, the SPAC is eligible to list on the EGX & raise even more capital. SPACs need a minimum capital of EGP 100 million to complete an acquisition.
What are Sponsors?🤔 Sponsors are the initial investors who together establish the SPAC, & usually have prior experience in the activities of the target company.
What’s a Target Company?🤷♀️ That’s the company the SPAC is eyeing to acquire.
However, SPACs have up to two years after they’ve gone public to acquire or merge with a target company. If the SPAC fails to do so, all raised funds are taken out of the trust account & back to investors.
What’s a Trust Account?🧐 The SPAC’s raised funds must be deposited into a trust account, where they are invested in risk-free instruments until an acquisition takes place.
SPACs will not be required to report financial statements until they’ve acquired a company, which makes sense considering their sole purpose is to acquire a company.
You’re all set!⭐
Edita Looks to Acquire Egyptian Belgian Company’s Assets🥯
Edita Food Industries (EFID) is in the process of acquiring the assets of the Egyptian Belgian Company (EBC), a manufacturer of baked goods under the brand name “Ole”.
More details🧐 The potential acquisition includes all of EBC’s assets, ranging from real estate holdings to machinery, equipment, & production lines.
Why is this important🤔 The acquisition is pending a due diligence examination on EBC, which should be finalized on or before 15 December 2021. Provided the due diligence investigation is satisfactory for Edita, an initial draft of the sale & purchase agreement will be prepared on or before 15 January 2022.
Unsettled Europe Brings Unease to Wall Street🔒
A fourth COVID-19 wave sent cases surging worldwide, & some European countries have already issued lockdown orders, bringing unease to the U.S. stock market.
More details🧐 Anti-lockdown protests sparked in Rotterdam, Netherlands, after the Dutch government issued a three-week partial lockdown. Austria also went into lockdown yesterday. Italy, Belgium, Czech Republic, Slovakia & Germany are all close to shutting down, with Germany a big concern for markets as it is a big exporter.
Why is this important🤔 COVID-19 developments in Europe are unsettling markets today because many investors probably assumed lockdowns were a thing of the past. With vaccination rates too low to reach herd immunity & a growing number of cases, the underlying fear is that the U.S. might also be on the brink of another wave.
Saudi Stock Exchange Company Set to List on…Saudi Stock Exchange💱
Saudi Tadawul Group Holding Company, which owns Saudi Arabia’s stock exchange “Tadawul”, announced the price range for its IPO, with J.P. Morgan & Citigroup as financial advisors.
More details🧐 The price range for the Offering has been set between SAR 95 & SAR 105 per share. The company plans to offer a 30% stake, equivalent to 36 million shares. This price range means the company is set to raise between SAR 3,420,000,000 & SAR 3,780,000,000 (>$1 billion).
The institutional offering will initially be the entire 30% stake. In the event there is substantial demand from individual investors, the company has the right to reduce the institutional offering to 25,200,000 shares, representing 70% of the total offered shares.
Why is this important🤔 Trading of the Company’s shares in the Exchange is expected to begin after all relevant regulatory requirements are satisfied, with the latest being the refund of excess subscription amounts (if any) on 8 December, 2021.
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