Vertex, Tikehau blank-cheque vehicles lodge prospectuses

Singapore

THE race to list the first special purpose acquisition company (SPAC) on the Singapore Exchange (SGX) heated up on Thursday (Jan 6), with two sponsors lodging their preliminary prospectuses with the Monetary Authority of Singapore (MAS).

Temasek-backed Vertex Venture Holdings said in a bourse filing on Thursday afternoon that Vertex Technology Acquisition Corporation (VTAC) had filed its preliminary prospectus for the offer of units in its S$200 million SPAC.

Meanwhile, the lodgement for the S$150 million SPAC, Pegasus Asia - sponsored by European asset manager Tikehau Capital, together with its partner Financiere Agache - came hours later in the evening.

Both companies are gunning to be the first SPAC listing on the SGX, following the introduction of a framework to allow such vehicles last September.

VTAC

VTAC's offering will be for 11.8 million units at an offering price of S$5 per unit, according to the prospectus lodged to MAS Opera.

This comprises 11.2 million units being offered by way of an international placement to investors, and a public offering of 600,000 units by way of public offer in Singapore.

At the same time, but separate from the offering, 13 cornerstone investors have also entered into cornerstone subscription agreements with VTAC to subscribe for an aggregate of 22.2 million cornerstone units at the S$5 offering price, to raise gross proceeds of S$111 million.

The sponsor, Vertex Venture, will also invest in the initial public offering (IPO), and a wholly-owned subsidiary of the sponsor will subscribe for 6 million units, raising S$30 million. The sponsor also has "at-risk capital contribution for payment of offering expenses and operating expenses" of up to S$10 million, in the form of subscribing for private placement warrants.

The market capitalisation of VTAC upon listing, based on the offering price and the post-offering share capital of 40 million shares will be S$200 million, and all of the gross proceeds will be held in escrow.

Each unit will consist of 1 share, and 0.3 of a warrant per share, which will be issued at the completion of the offering. An additional right to 0.2 of a warrant per share will only be issued later to holders of shares (which have not been tendered for redemption) at or around the completion of the initial business combination.

VTAC intends for its initial business combination to occur with one or more target businesses "at the forefront of technology transformation". The targeted investment themes include artificial intelligence, cybersecurity and enterprise solutions, consumer Internet and technologies, financial technologies, autonomous driving and new-energy vehicles, biomedical technologies and digital healthcare.

The final prospectus may be registered by MAS between 7 and 21 days from the date of lodgement of the preliminary prospectus, unless MAS extends the exposure period, Vertex Venture said in the bourse filing. The offering will be made following the registration of the final prospectus

Vertex Venture - a Singapore-based global venture capital platform - has over 200 companies in its portfolio. The investment platform has over US$5.1 billion of assets under management, of which around US$3.7 billion is managed by global network funds with independent general partners.

Pegasus Asia

Pegasus is offering 25.6 million units, each comprising one share and half a warrant, at S$5 per unit, according to its prospectus on MAS Opera.

A market capitalisation of S$150 million is expected upon listing, with all of the offering proceeds to be held in escrow.

Some S$22 million will come from the SPAC's 4 sponsors - Tikehau, Financiere Agache and the individuals Diego De Giorgi and Jean Pierre Mustier. The sponsor group has entered agreements to subscribe to 4.4 million units.

The remaining S$128 million will be raised via the offer of the 25.6 million units. Some 24.6 million units are by way of an international placement to investors, including institutional in Singapore, while the remaining 1 million units is by way of a public offer in Singapore.

The sponsor group will also subscribe to founder shares and warrants, which will represent its "at-risk" investment, for a total deal of up to S$8.1 million.

Pegasus' sponsors are also further investing S$40 million via a forward purchase agreement with Tikehau Capital and Financiere Agache contributing S$20 million each at the point of business combination.

The SPAC plans to focus on businesses in tech-enabled sectors including consumer tech, fintech, proptech, insurtech, healthtech and digital services in Asia-Pacific. As with typical SPACs, it has 2 years from listing to complete its business combination with a target company.

The indicative timeline for Pegasus' listing on the SGX is Jan 25, according to a source.

Tikehau Capital is an alternative asset manager with 30.9 billion euros (S$47.4 billion) in assets under management as at end-June 2021. Its key areas of focus include private equity and debt, as well as real assets.

Tikehau Capital and Financiere Agache - LVMH CEO Bernard Arnault's family office - have previously partnered on SPACs. Last year, the sponsor group raised a 500 million euro SPAC - Pegasus Europe - on Euronext Amsterdam.

The listing of SPACs in Singapore could provide a boost to SGX.

Just 8 companies carried out IPOs in Singapore last year, and the total proceeds from these listings lagged behind regional exchanges such as Indonesia, Thailand and the Philippines, where IPO activities have been robust.

Market observers The Business Times spoke with previously have said that SPACs are one of the bright spots they see for local IPOs in 2022.

Besides Vertex and Tikehau, other sponsors have also shown interest in listing SPACs on SGX.

Earlier this week, Bloomberg News reported that Singapore-based Novo Tellus Capital Partners received an eligibility-to-list letter from SGX last month, with an aim to file its preliminary prospectus this month.