Grab to list on Nasdaq on Thursday after Altimeter investors approve Spac merger

The combined entity will trade on the Nasdaq under the ticker GRAB. PHOTO: ST FILE

SINGAPORE - Super-app Grab will list in the United States on Thursday (Dec 2), after Altimeter Growth Corp's investors approved the merger between the two companies.

The combined entity will trade on Nasdaq under the ticker GRAB after the proposal was passed at an extraordinary general meeting on Tuesday.

The merger is one of the largest special purpose acquisition company (Spac) deals ever, valuing the combined entity at nearly US$40 billion (S$54.6 billion).

"We truly believe this is South-east Asia's time to shine, and we hope that our entrance into the global public market will help bring greater attention to the tremendous opportunity here in the region," said Anthony Tan, Group CEO and co-founder.

He added: "Our evolution into a superapp was guided by the everyday problems we wanted to solve for the people we care about, and accelerated by the growing appetite for digital services in a rapidly transforming landscape. From on-demand mobility and deliveries to digital financial services, enterprise services and more, we believe we are only scratching the surface of the opportunity ahead of us.

"While there's no doubt this is an exciting moment, we're grounded in the knowledge that this is just day one. Our calling remains the same - to unlock greater opportunity for all South-east Asians to participate in the digital economy."

Singapore-headquartered Grab, which started out in the ride-hailing business, has expanded its business operations to delivery and digital financial services in more than 400 cities across eight countries in South-east Asia.

Altimeter Growth said in a statement that there were virtually no shareholder redemptions, or shareholders voting to receive their investment back. Redemptions came in at 0.02 per cent.

As part of the deal, Grab will receive US$4.5 billion in cash, including US$4 billion in private investment managed by Morgan Stanley, BlackRock, Temasek Holdings, Fidelity, Altimeter, and T. Rowe Price.

Grab's merger with Altimeter Growth was announced in April, around the peak of Spac interest. The deal, originally slated for completion in the third quarter of this year, was delayed as a financial audit of Grab's accounts was being finalised.

Last month, Grab reported that its net loss widened to US$988 million in the third quarter ended September, while revenue fell 9 per cent to US$157 million due to the decline in its mobility business as a result of Covid-19 lockdowns in Vietnam.

Its revenue drop came despite its gross merchandise revenue growing 32 per cent to US$4 billion for the period.

In recent weeks, Grab's app has experienced service issues, with users in Singapore and other markets facing intermittent disruption and being unable to order food or make ride bookings.

Commenting on Grab's listing, Cathay Innovation director Rajive Keshup said that the firm's going public signals a landmark for the South-east Asia tech ecosystem.

"There are a number of signals of confidence such as the low redemption rate which highlight Grab being a real flag bearer upon which a number of key players within the ecosystem are pinning their hopes.

"Should they do well it will pave a favourable path for the four to five other Spacs which are set to go right after," he said.

Mr Keshup also noted that it has been difficult to put together Spac deals and associated PIPEs (private investment in public equity) in recent months, and he does not view such a move to be a viable outcome for now unless all the South-east Asia Spac deals in the pipeline "knock it out of the park" in the first half of 2022.

Origin Capital chief executive and chief investment officer Kelvin Tan also referred to Grab's listing as a "bellwether for more to come".

At the same time, its regular financial reporting as a listed company would likely also help to allay concerns about the company's profitability and provide better communication to retail investors, he added.

The low redemption rate from initial investors is also a sign of confidence and is all the more reassuring considering how capital markets are shaky given concerns over the new Omicron Covid-19 variant, Mr Tan said.

Moving forward, it is likely that more Grab executives could cash out on their employee stock options and look to start their own companies or invest in other start-ups, further catalysing investment in the region, he noted.

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