Special Purpose Acquisition Company Update
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The Singapore Exchange has become the first major exchange in Asia to allow blank check companies to list, even if the market is subject to stricter scrutiny by global regulators.
The exchange said on Thursday that the special purpose acquisition company (Spacs) will begin to apply for listing on the SGX on Friday.
The entity will require a market capitalization of at least 150 million Singapore dollars (111 million US dollars)-half of the amount previously proposed by SGX-while removing restrictions on shareholder redemption rights. After conducting market consultations, SGX softened some of its initially proposed measures.
Tan Boon Gin, Chief Executive Officer of the Supervision Department of Singapore Exchange, the regulator of SGX, said: “We hope that through the SPAC process, excellent target companies listed on the SGX can be produced, providing investors with more choices and opportunities.” He added. , SGX will focus on the quality and record of sponsors.
Over the years, Singapore has been trying to attract fast-growing, well-known companies to join its exchange.Low liquidity and valuation have triggered a series of company Delisting, and some of Hong Kong’s most promising local technology start-ups, such as Sea and Razer, chose to list in the United States and Hong Kong.
In response, SGX tried to support Other growth areas, Including increasing its attractiveness as a center for investors to trade bonds, foreign exchange, commodities and derivatives.
It also has Encourage Some offshore listed companies in Singapore are considering “returning to China” or relisting in the city state.
According to a report by the Financial Times in June, Singapore companies that have discussed this initiative include Sea, a gaming and online commerce company listed in New York in 2017, Grab, a ride-hailing and food delivery app, and Razer, a Hong Kong-listed gaming group.
Spacs has always been one of the most popular asset classes in the United States. Raised US$79.4 billion Last year worldwide. Spacs is a shell company that raises funds by listing on the stock market before looking for a merger target. In the past year, celebrities and celebrities on Wall Street have competed fiercely in sponsoring promising private targets (mainly technology companies).
Jonathan Quek, head of investment banking at Citigroup Singapore, said that SGX’s move will be welcomed by both the initiators and targets of Spac.
He added, “There are a lot of interesting opportunities in Singapore and the region”.
However, SGX’s move coincides with the global Spac mania Start to fadeThe number of transactions has attracted the attention of US securities regulators, and some analysts say that prices have become too high for companies that are usually speculative.
Robson Lee, a partner at Gibson Dunn Law Firm, said that the Singapore Exchange Regulatory Authority (RegCo) has spent “a considerable amount of time” listening to industry feedback and considering recent regulatory developments in the United States.
“The new basic rules of Singapore Spacs consist of two main components-to provide investors with opportunities to participate in the growth and development of promising private companies, while ensuring safeguards to protect public investors without distorting its concept and substance. [the vehicles],” Li said.