Legendary financier and former shipping investor Wilbur Ross has suffered a setback in his plans to cash in on the once-hot market for blank-cheque IPOs known as special purpose acquisition companies (Spacs).
The former Diamond S Shipping and Navigator Gas Holdings chairman said on Monday that the New York Stock Exchange has notified his Spac company that it plans to suspend trading of its shares and warrants and begin delisting proceedings.
The news comes exactly three years after Ross successfully floated the IPO.
The company, known as Ross Acquisition Co II, does not plan to appeal against the ruling. However, it is attempting to keep the venture alive by applying for a listing on New York’s Nasdaq exchange.
The New York Stock Exchange action came because a company is not allowed to maintain a Spac listing for more than three years without completing a business combination.
Ross, who ditched his shipping investments to become US secretary of commerce under then-president Donald Trump, was one of many celebrity figures to come forward with a Spac in a peak market for the structures in 2020 and 2021.
While there was never any clear indication that the Spac would have a shipping target, Ross fuelled speculation by recruiting two former colleagues who had worked on his shipping investments to take part in the effort.
Nadim Qureshi, who succeeded Ross as Diamond S chairman, was tapped as head of mergers and acquisitions for the outfit.
Qureshi until recently held a board seat at US-listed International Seaways as a result of its takeover of Diamond S in an all-stock deal in 2021. Qureshi was one of three Diamond S directors who came to Seaways under the terms of the deal.
Ross also enlisted Steven Toy as chief financial officer. Like Qureshi, Toy formerly worked for Ross at his WL Ross & Co private equity firm before it was sold to Invesco.
The “King of Bankruptcy” ultimately did not choose a shipping target. Ross instead pursued Hong Kong-based bio-pharmaceutical outfit Aprinoia Therapeutics in a $320m deal. But the two companies announced last August that they had terminated the combination agreement.
Ross shareholders last September approved a six-month extension of its efforts to find a new target. But holders of about $14.4m worth of units decided to redeem them, leaving about $54.2m remaining in trust.
The Ross Spac could gain another three-year window if it wins acceptance on Nasdaq. However, it currently has only until 15 September under an extension agreement with holders before it would face the next call to return investment funds.
Spacs, or “blank cheque” companies, involve raising a blind pool of capital from investors who trust a sponsor to find a business opportunity that will be more highly valued by public markets than it is in private ones.
Spacs have a history in shipping, leading to the founding of dry bulk owners Star Bulk Carriers and Navios Maritime some 15 years ago, but have proved more difficult to execute in recent years.
