Exclusive information from regulatory filings in Canada. This reveals that FG Acquisition Corp’s coffers have been nearly emptied following a mass redemption event by its public shareholders. The special purpose acquisition company (SPAC), FG Acquisition, listed as FGAA.U on the Toronto Stock Exchange (TSE), had previously agreed to merge with Retail FX and CFDs broker ThinkMarkets.
According to the regulatory filings, FG Acquisition’s “Funds Held in Escrow” plummeted from USD $118.7 million on June 30, 2023, to just under $2.5 million as of September 30, 2023.
The proposal of a merger between FG Acquisition and ThinkMarkets was shared in mid-May 2023. This was to bring ThinkMarkets public on the Toronto Stock Exchange at a valuation of USD 160 million. The deal would have seen FG’s public class A shareholders owning a 43.3% interest in the combined entity. Furthermore, ThinkMarkets’ shareholders would hold 53.4%. The remaining 3.3% was to go to the SPAC sponsors led by financier Larry G. Swets Jr.
However, in a surprising turn of events in early July, a significant number of FG class A shares were redeemed by shareholders at approximately USD $10.21 per share. This resulted in FG returning about $116.3 million in cash to investors. This mass redemption essentially left FG as a publicly traded shell company with minimal cash reserves.
FG Acquisition: Cash Crunch Imperils ThinkMarkets Merger
The decision by FG shareholders to redeem their shares followed an earlier FNG Exclusive report detailing ThinkMarkets’ substantial debt and losses over the preceding two years (2021-2022). The parent company, Think Financial Group Holdings Limited in Australia, had also received a “going concern” warning from auditors.
Despite withdrawing its preliminary prospectus, FG Acquisition intends to proceed with the ThinkMarkets deal. However, a looming challenge now confronts FG, as it must secure at least $10 million in fresh capital by the extended deadline of November 30. Failure to meet this deadline could result in the cancellation of the merger with ThinkMarkets. This is unless an additional extension is granted. The situation adds further uncertainty to the fate of the proposed merger. It also raises questions about FG Acquisition’s ability to overcome its current financial constraints.
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