Novo Tellus lodges preliminary prospectus for S$150m SPAC listing

BUYOUT firm Novo Tellus Capital Partners is the third entity to file for the listing of a special purpose acquisition company (SPAC) on the Singapore Exchange (SGX). It is planning to raise some S$150 million for the listing of Novo Tellus Alpha Acquisition (NTAA).

According to the preliminary prospectus lodged with the Monetary Authority of Singapore (MAS) on Thursday (Jan 13), NTAA intends to issue up to 30 million units in total at the offering price of S$5 apiece.

This includes 10 million offering units through a S$50 million initial public offering (IPO) of 9.5 million placement units and 500,000 public offer units, as well as an agreement for the sponsor, Novo Tellus PE Fund 2, to subscribe to 4 million units for S$20 million.

NTAA has also secured 13 cornerstone investors to subscribe for 16 million cornerstone units, equating to gross proceeds of S$80 million.

Venezio Investments is one such cornerstone investor. The Temasek-owned company has subscribed to 1.5 million units, which would account for 5 per cent of the SPAC's market capitalisation post-offering.

Each of the IPO units consists of 1 Class A share of NTAA, and half of 1 public warrant. A whole public warrant entitles the holder to subscribe for 1 Class A share at the price of S$5.75 apiece.

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Holders of these Class A shares will be able to redeem their shares for a pro-rata portion of the SPAC's account in escrow at the business combination vote.

Under its sponsor subscription agreement and as part of its "at-risk" capital contributions, Novo Tellus PE Fund 2 will also subscribe for S$7 million worth of warrants in a private placement of 14 million warrants at S$0.50 per warrant, which will close with the close of the IPO. NTAA may further call for additional capital of up to S$2 million from the sponsor by requiring it to subscribe for up to 4 million new warrants at S$0.50 per warrant.

Credit Suisse and DBS have been jointly appointed as global coordinators, issue managers, bookrunners and underwriters for the deal.

NTAA's sponsor group consists of the sponsor general partner New Earth Group 2, Novo Tellus Capital Partners and the private equity funds which it advises - namely Novo Tellus PE Funds 1 and 2. Novo Tellus PE Fund 1 is in the process of voluntary liquidation after having reached the end of its fund life. 

The SPAC's executive chairman and chief executive officer (CEO), Loke Wai San, also heads the sponsor group and is the founder and CEO of Novo Tellus Capital Partners. He has been chairman of mainboard-listed AEM Holdings since 2011, and currently sits on the boards of the sponsor group's SGX-listed portfolio companies including Grand Venture Technology and Procurri Corporation. 

In the preliminary prospectus, NTAA said its sponsor group's public portfolio companies have generated aggregated equity growth of approximately 312 per cent through to Sep 30, 2021, translating to average annualised equity returns of about 56 per cent per year. 

The SPAC positions itself as "a distinctive opportunity to invest alongside a leading private equity fund" that is Novo Tellus PE Fund 2 - backed by a sponsor group with a "clear, repeated track record of successful investments" in technology and industrials companies.

NTAA joins 2 other SPACs -- Vertex Technology Acquisition Corporation (VTAC) and Pegasus Asia -- that are also seeking a listing on SGX.

VTAC, like NTAA, counts Venezio Investments among its cornerstone investors.