SPAC seeks extra time for insurance deal

(Reuters) — Financials Acquisition Corp. said Wednesday it would seek shareholder permission next month for more time to create a billion pound ($1.28 billion) insurance undertaking.

The special purpose acquisition company, which was floated in April 2022, said it has identified a potential target company that could involve the company raising “substantial” additional funds.

It would become a listed operating company deploying funds into the Lloyd’s of London insurance market for reinsurance purposes, the company said.

The company said it will be seeking shareholder approval next month to extend the deadline for completing a deal until the end of December.

“During the company’s search process it became clear that the global specialty insurance market and specifically risk underwritten in Lloyd’s market offered some of the most attractive risk-adjusted returns globally,” the company said in a statement.

Lloyd’s has created a new structure, London Bridge 2 PCC Ltd., which allows easier access for institutional capital into the market, the company said.

The company said it expects to have access to up to one billion pounds of capacity into the 2024 underwriting year.

Proposals are at an early stage and the company said it remains confident that with the benefit of an extension it would be able to complete this deal or another business combination.

SPACS, once a frothy corner of the listings market, have a set period to find a target, with some having to hand back money to investors after being unable to meet their agreed deadline.