Novo Tellus Alpha Acquisition slips on trading debut

SGX ticker at Shenton Way building in Singapore; taken October 2018.SGX ticker at Shenton Way building in Singapore; taken October 2018.

Novo Tellus Alpha Acquisition (NTAA), the third special purpose acquisition company (SPAC) to list in Singapore, fell on its trading debut Thursday. 

The units were at S$4.90 at 12:14 p.m. SGT, down 2 percent compared with the initial public offering (IPO) price of S$5.00. 

A local dealer told Shenton Wire he believed the trading debut was being affected by the recent selloff in tech stocks

He noted one of the major investments of the sponsor group, led by Novo Tellus PE Fund 2 LP, has been AEM Holdings, which makes semiconductor testing products.

“All tech stocks are selling off. Perhaps people are just selling off to release cash as no investment is expected in the very short term,” the dealer said in a text message.

SPAC is essentially a “blank check” company, which raises funds in a public offering and seeks businesses or other assets to acquire later.

NTAA has said it plans to target the technology and industrials sector in the Indo-Pacific region as it seeks a business to acquire.

To be sure, the listings of Singapore’s first two SPACs — Pegasus Asia and Vertex Technology Acquisition Corp. (VTAC) — were also tepid, even as all three SPACs have reported strong demand during the IPO process. On Thursday, Pegasus Asia was flat at its IPO price of S$5.00 at 12:39 p.m. SGT, while VTAC was at S$5.00, down 0.2 percent on the day, but unchanged from its IPO price.

Sponsor Novo Tellus PE Fund 2 LP is the principal fund of the sponsor group, which includes New Earth Group 2, which is the general partner of the sponsor, Novo Tellus Capital Partners and the private equity funds advised by Novo Tellus Capital Partners, which are the sponsor and Novo Tellus PE Fund 1 LP, which reached the end of its fund life and is in the process of liquidation.

The sponsor group invested in AEM from 2011 to 2018, when it exited; from the time of the initial investment through end-September 2021, shares of AEM have posted an around 4,600 percent gain. Singapore state-owned investment company Temasek Holdings has a 9.08 percent interest in AEM as of 25 November 2021, according to SGX data.  

Venezio Investments, an indirect wholly owned subsidiary of Temasek Holdings, took up 1.5 million units as a cornerstone investor in NTAA, or a 4.7 percent stake assuming the overallotment option is exercised in full, the prospectus said.

Loke Wai San, the non-executive chairman and director of AEM, is also the executive chairman and CEO of NTAA. 

In a statement Thursday, Pol de Win, senior managing director and head of global sales and origination at SGX, pointed to the sponsor’s track record with stocks listed on the exchange.

“With years of experience investing successfully in technology and industrials companies, the sponsor group has generated strong equity growth and returns on SGX over the last decade via its investments in SGX-listed companies such as AEM Holdings, Grand Venture Technology and ISDN Holdings,” he said. “The sponsor group’s established track record and reputation for building equity value and long-term, institutional investor support for its portfolio companies provide investors with confidence in this SPAC offering.” 

On Thursday, shares of AEM were down 3.59 percent at S$4.57 at 12:31 p.m. SGT.