Lloyd’s of London SPAC venture was scrapped due to volatile markets. On Monday, Financials Acquisition Corp. (FINSF.L) announced it would go into liquidation after calling off a planned merger with its newly established insurance venture. The company cited “insufficient” financial commitments due to unpredictable capital markets as the reason for the decision.
The particular purpose acquisition company (SPAC) had made plans public to merge with London Innovation Underwriters (LIU) and raise additional funds for investments in the Lloyd’s of London insurance market.
According to the announcement made by the corporation, a shareholder meeting scheduled to take place on November 14 to seek up to 300 million pounds in funding has been canceled.
The SPAC has until the end of the year to use the monies gathered for a takeover, and the organization has stated that it would not seek an extension. Financials Acquisition Corp. said, “As a result, the company proposes to cease operations, other than to return funds to shareholders and conduct an orderly winding up of the company.”
“To ensure due payment of creditors, the company proposes to appoint a liquidator as soon as practicable to administer the winding up of operations and expects to release a further announcement regarding this process in due course.” LIU said that despite interest from a diverse group of investors, the demand was inadequate to meet the minimum cash requirement.
LIU stated that it may investigate seeking alternative solutions to access the insurance market at Lloyd’s of London. Even though revenues at Lloyds of London are expanding thanks to increased costs for insuring commercial risks, this attempt to boost the city’s attraction as a center for capital markets was unsuccessful. This comes when there is a scarcity of fresh listings in London and worries over its appeal as a capital markets hub.
After a flurry of acquisitions in the early days of the COVID-19 epidemic, the popularity of SPACs has declined due to their inability to locate firms with whom to combine forces. After completing an acquisition, several companies have seen their stock performance suffer significantly.