North Atlantic Acquisition Corporation, the $400 million Irish-backed Spac, has confirmed it will hold a virtual shareholder meeting on January 24 to extend the deadline for closing a deal, rather than the return money to investors immediately.
he Irish Independent reported earlier this month that the company was planning a meeting but had not announced a date at this time.
North Atlantic Acquisition Corporation (NAAC) currently has until the end of January to close a transaction or return its funds to shareholders.
At next month’s meeting, she will ask investors to extend the deadline for closing a deal to the end of July.
“Because we continue to believe that an initial business combination would be in the best interests of our shareholders, and because we are unable to complete a business combination within the permitted timeframe, the board has decided to seek shareholder approval to extend the date to which we to complete a business combination beyond the current deadline by the extended date,” it informed shareholders in a circular.
NAAC is one of dozens of so-called special purpose acquisition companies (spacs) formed over the past few years as investors have been flooded with cash in a low-interest-rate environment to get better returns on their money.
Spacs have since fallen out of favor.
NAAC raised $400 million in January last year and is listed on the Nasdaq in New York.
It has informed shareholders that if they agree to the extension, the sponsor – its original founders including CEO Gary Quin and Irish businessman Patrick Doran – have agreed to fund the deal through the extended date.
If no shareholders redeem their shares before then, the sponsor would make contributions totaling $12.5 million between January and July.
Mr. Quin is a former Vice President of Credit Suisse. Mr Doran sold his Dublin-based packaging company, Americk, to Spanish group Saica in 2016. He then founded Woodberry Capital, a private investment firm.
NAAC founders, including Mr. Quin and Mr. Doran, have raised just $25,000 for their charter shares. They control 20 percent of NAAC’s total outstanding shares.
As part of this holding, they have more than 7.1 million placement warrants that were purchased for $10.7 million. Both the warrants and the charter shares would be worthless if a business combination were not consummated.
North Atlantic Acquisition Corporation had planned to merge with US tech company Telesign, owned by Belgian wireless company Proximus, earlier this year. But this deal fell through in the summer.
This proposed transaction values Telesign at more than $1.7 billion, including cash from NAAC.
Proximus would have retained a 66 percent stake in Telesign. NAAC shareholders would have owned 22 percent of the combined company, while 4.9 percent would have been split between NAAC’s founders.
https://www.independent.ie/business/irish/irish-backed-400m-spac-will-ask-investors-for-more-time-to-make-a-deal-42237143.html Irish-backed $400m Spac will ask investors for more time to finalize a deal