Two companies are already eyeing setting up SPACs in Egypt to acquire and list fintech players, Zulficar & Partners founding partner Anwar Zeidan told Enterprise, confirming a story that was originally published in Al Mal. The companies are both non-banking financial services (NBFS) players, one of which is Egyptian, while the other is international with stakes in several Egyptian companies, according to Zeidan, who declined to name them. These companies are currently in talks with the Financial Regulatory Authority (FRA) about the steps they would need to take once SPACs are formally allowed.

That was fast: The news comes one day after the FRA greenlit a plan spearheaded by EGX boss Mohamed Farid to allow SPACs in Egypt. The blank-check companies would be subject to the same regulations as venture capital firms under the Capital Markets Act, with listing and delisting rules still to be decided by the market regulator.

There has been interest since at least 2Q: The international firm reached out to Zulficar to inquire about listing SPACs in Egypt around five months ago, Zeidan told us. Since then, the law firm has been discussing the potential introduction of SPACs with officials at the FRA and EGX, he said.

It all began with Swvl deciding to go public: Swvl’s announcement that it will list on the Nasdaq via a SPAC merger earlier this year seemed to have triggered interest among policymakers here. The idea was first publicly disclosed after Prime Minister Moustafa Madbouly met with the Egyptian transport app and a number of other startups a few days after the merger with US Queen’s Gambit Growth Capital was finalized.

How would Egyptian SPACs work, again? SPACs would be set up with an initial capital of EGP 5 mn, similar to a VC firm in Egypt, says Zeidan. SPACS would work to get institutional investors to buy in before floating on a stock exchange and placing the funds raised into an interest-bearing trust account for a maximum of two years while it looks for a company to acquire or merge with.

And what happens next? The proposed acquisition goes to a general assembly meeting, where shareholders weigh in and are given the option of exiting the SPAC and getting a drawback on their funds. The remaining shareholders then give the acquisition their blessing and the process moves forward. In the event that the SPAC fails to close an acquisition within the two-year window, it is liquidated and the funds are given back to investors along with returns from the fixed-income investments.

Still need a refresher? We have a full primer on why — and how — SPACs work in Western markets.