Singapore SPAC listing marks third such IPO this month

A man wearing a protective face mask walks past the Singapore Exchange SGX in the central business district of Singapore on April 7, 2020. REUTERS Edgar Su Files

SINGAPORE, Jan 27 Reuters -- Southeast Asian industrial technology buyout fund Novo Tellus Capital Partners listed its Special purpose acquisition company SPAC in Singapore on Thursday, marking the third such IPO this month, as the city-state seeks to become a hub for SPAC listings.

A trio of SPAC listings in Singapore came about a year after a frenzy of blank-cheque firms in the United States stalled when regulatory changes and poor returns affected investor sentiment. Novo Tellus Alpha Acquisition NOVOU.SI, which raised S $150 million $111 million, traded at S $4.96 versus its initial public offering IPO price of S $5 per unit. Each unit has one Class A share and one half of a warrant exercisable at S $5.75 per share.

SPACs, or shell firms, raise money on stock markets to buy private companies, so they bring businesses to markets in shorter time frames and stronger valuations.

At a Thursday listing ceremony, Novo Tellus Alpha Acquisition Chief Executive Loke Wai San said structural change in supply chain trends would benefit industrial and technology companies in the region. He said Singapore was a key venue to list SPACs.

Loke, CEO of Novo Tellus, told Reuters last week that we would be looking at companies in the range of S $500 million to S $1 billion.

He said investors had expectations of stable growth, profitability, and not hyper growth, and huge losses for the SPAC target group of industrial companies.

The Vertex Technology Acquisition Corp Ltd VERTU.SI sponsored by a unit of Singapore state investor Temasek Holdings TEM.UL raised S $200 million in the city earlier this month.

A SPAC of S $170 million was backed by European asset manager Tikehau Capital TKOO.PA and LVMH LVMH.PA CEO Bernard Arnault. Hong Kong is not allowed for SPAC listings this year, but it bars participation from retail investors. Novo Tellus' SPAC IPO was heavily oversubscribed. The IPO, sponsored by Novo Tellus PE Fund 2, secured 13 cornerstone investors, including Malaysia's Affin Hwang Asset Management Bhd and an indirect, fully owned subsidiary of Temasek.

Credit Suisse and DBS were the joint issuer managers and global co-ordinator of the IPO.