Catalyst Partners Consulting has submitted a formal application to the Financial Regulatory Authority (FRA) to establish Egypt’s first Special Purpose Acquisition Company (SPAC). The proposed SPAC, to be named Catalyst Partners Middle East (CPME), will focus on acquiring companies operating in the non-banking financial services and financial technology sectors.

The move comes swiftly on the heels of the FRA’s recent amendments to securities listing and delisting rules, which paved the way for SPACs in the Egyptian market. The regulatory changes, outlined in Board of Directors’ Decisions №140 and 148 of 2024, aim to bolster the local capital market and provide alternative financing avenues for promising businesses.

CPME, if approved, will operate as a venture capital company with the primary goal of identifying and acquiring target companies within the specified sectors. The SPAC will raise capital through a private subscription on the stock exchange, restricted to qualified investors and financial institutions.

SPACs, relatively new to the Egyptian market, are shell companies that raise funds through an initial public offering (IPO) to acquire an existing company within a specific timeframe. This mechanism offers an alternative route to market for companies, especially those in high-growth sectors like fintech and non-banking financial services.

By introducing SPACs, the FRA seeks to stimulate economic growth, create jobs, and enhance Egypt’s position as a regional financial hub. The authority believes that these vehicles can facilitate the expansion of non-banking financial activities and broaden access to financial services for a wider population.

Catalyst Partners Consulting, through its legal advisor Matouk Bassiouny & Hennawy, is now awaiting the FRA’s decision on the CPME application. If approved, the SPAC would mark a significant milestone for Egypt’s capital markets and the broader financial ecosystem.