Grab heads for world’s biggest SPAC deal, may also list in Singapore

Southeast Asia’s biggest ride-hailing and food-delivery player Grab is gearing up to list in the US, followed by a potential debut on the Singapore Exchange.

  • Grab Holdings intends to list its shares on Nasdaq through a SPAC merger
  • It will be valued at US$39.6 billion after the proposed deal, set to close this July
  • A secondary listing on SGX is also possible, Reuters said
  • Deliveries could be the major growth driver for Grab by 2023

SPAC merger: What are the highlights?

Singapore-based Grab plans to go public in the US via a merger with special purpose acquisition company (SPAC) Altimeter Growth Corp (Nasdaq: AGC).

The transaction, slated to close in July 2021, will value the ride-hailing giant at almost US$40 billion, more than double its valuation of over US$16 billion in 2020.

This is set to be the world’s largest SPAC deal ever, Reuters reported.

The combined entity’s securities will trade under the ‘GRAB’ ticker symbol on Nasdaq.

Anthony Tan, Grab’s CEO, will control 60.4% of the company’s voting power following the deal, The Business Times (BT) reported.

Shares of Altimeter Growth finished 9.9% higher last Tuesday (13 April 2021) at US$15.33 following the announcement, although they lost 18.3% over the next few days to close at US$12.52 on Friday (16 April 2021).

Why do credit analysts like the mega SPAC deal?

S&P Global said Grab’s ‘backdoor-style IPO’ and the expected US$4.5 billion cash proceeds will erase its refinancing risk in 2023, and support its cash burn.

Grab’s 2023 maturity wall comprises convertible redeemable preference shares, and the redemption rights of these bond holders will fall away with a public listing as they are converted into equity.

Moody’s Investors Service placed Grab’s ratings under review for upgrade. ‘Grab’s public listing will add US$4-4.5 billion of liquidity buffer upon completion, which will support the company’s growth plans,’ wrote Moody’s analyst Stephanie Cheong.

Will Grab list its shares in Singapore?

Grab is also mulling a secondary listing in its home market, Singapore, after it completes its Nasdaq debut via the Altimeter SPAC merger, Reuters reported.

Listing on the Singapore Exchange (SGX) will enable the company to have an investor base close to where its regional business is headquartered, sources told Reuters. That may thus offer its customers, drivers and merchants easier access to trade its shares.

If an issuer’s home markets are within the region, listing in Singapore can help it tap another pool of investors, as there are many family offices and funds based in the city-state, highlighted lawyer Raymond Tong from Rajah & Tann Singapore.

What will fuel Grab’s growth?

Grab operates in eight countries and nearly 400 cities. The ‘super app’ has businesses in deliveries, ride-hailing, and financial services.

Grab expects to achieve adjusted net revenue of US$4.5 billion in three years, and its food delivery business will make up about 49% of this amount.

The group anticipates that the largest percentage of revenue could come from deliveries by 2023.

It is also trying to diversify its financial services business, as payments revenue could be on a slump until FY2022. Grab, together with Singtel (SGX: Z74), won a digital-bank licence in Singapore last year.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.