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BT EXPLAINS

BT Explains: Why do Singapore-listed Spacs have vastly different redemption prices? 

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Navene Elangovan

Published Fri, Feb 2, 2024 · 07:26 PM
    • A Spac's cash management, fee expenses and number of redeemable shares can affect its redemption price, say analysts.
    • A Spac's cash management, fee expenses and number of redeemable shares can affect its redemption price, say analysts. PHOTO: BT FILE

    TWO special-purpose acquisition companies (Spacs) – Novo Tellus Alpha Acquisition (NTAA) and Pegasus Asia – announced differing redemption prices for their shares this week. This was even though both had the same initial public offering (IPO) price of S$5 per unit.

    NTAA will let investors redeem S$5.18 for each Class A share, higher than the S$5.03 rounded-up price offered by Pegasus Asia.

    Peggy Mak, research manager at Phillip Securities Research, described NTAA’s redemption price as a “positive surprise”. She noted that the price translates into a return of about 3.6 per cent over two years.

    SPACPegasus AsiaNovo Tellus Alpha Acquisition (NTAA)

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