© Reuters. FILE PHOTO: A view shows the Lutine Bell during an event to mark accession of Britain’s King Charles at the Lloyd’s Building in the City of London, Britain, September 15, 2022. REUTERS/Sarah Meyssonnier/File Photo

By Huw Jones

LONDON (Reuters) – Financials Acquisition Corp said on Monday it would enter liquidation as it scraps a planned merger with its newly formed insurance venture, citing “insufficient” cash commitments due to volatile capital markets.

The special purpose acquisition company (SPAC) had unveiled plans to combine with London Innovation Underwriters (LIU) and raise additional funds to deploy in the Lloyd’s of London insurance market.

A shareholder meeting planned for Nov. 14 to approve the tie-up plans and seek up to 300 million pounds has been cancelled, the company said.

The SPAC has an end of year deadline to use funds raised for a takeover, and said it would not seek an extension.

“Consequently, the Company proposes to cease operations, other than for the purpose of returning funds to Shareholders and conducting an orderly winding up of the Company,” Financials Acquisition Corp said in a statement.

“In order to ensure due payment of creditors, the Company proposes to appoint a liquidator as soon as practicable to administer the winding up of operations, and expects to release a further announcement regarding this process in due course.”

LIU said despite interest from a wide range of investors, the level of demand was insufficient to reach the minimum cash threshold required.

LIU said it would consider exploring alternative options to pursue its strategy of accessing the Lloyd’s of London insurance market.

The failed effort comes amid a dearth of new listings in London and concerns over its appeal as a capital markets hub, despite profits at Lloyds (LON:) of London which are booming thanks to rising prices for insuring commercial risks.

Following a frenzy of deals in the early days of the COVID-19 pandemic, SPACs have lost popularity as they struggleto find businesses to merge with. Others have seen lacklustre stock performance after acquiring a target.