Special Purpose Acquisition Companies ("SPACs") is a new listing
vehicle to the Singapore market. SPACs offer investors the
opportunity to have a stake in acquisition targets identified by
generally established and reputable founding shareholders of the
SPAC. SPACs in themselves have no prior operating history. They are
set up for the purpose of acquiring businesses identified with
specific growth objectives or sectors in mind.
SGX launched the Special Purpose Acquisition Companies (SPACs) Framework to introduce a new listing vehicle to the Singapore market, in light of market developments, increased interest, and potential M&A opportunities in the Asia Pacific region. SGX believes that the introduction of SPACs will generate benefits to capital market participants and become a viable alternative to traditional IPOs for fundraising in Singapore and the region.
As a Maybank Securities client, you can take advantage of the wide range of financing facilities available. In addition, you will always have flexibility, choice and market information at your disposal whether you choose to trade online and through our trading representatives.
Special Purpose Acquisition Companies ("SPACs") are formed to raise
capital through IPOs for the sole purpose of acquiring operating
business(es) or asset(s) (i.e. business combination). Such
acquisitions may be in the form of a merger, share exchange or other
similar business combination methods. Prior to a business
combination, SPACs are listed investment vehicles with no prior
operating history and revenue-generating business/asset at IPO.
In light of market developments, increased interest, and potential M&A opportunities in the Asia Pacific, SGX has launched the Special Purpose Acquisition Companies (SPACs) Framework to introduce a new listing vehicle to the Singapore market. SGX believes that the introduction of SPACs will generate benefits to capital market participants and become a viable alternative to traditional IPOs for fundraising in Singapore and the region.
More information on Special Purpose Acquisition Companies (SPACs).
Similar to trading stocks, you may buy or sell SPACs through your trading representative or on our online and mobile platforms.
A SPAC is generally established and initially financed by experienced and reputable founding shareholders (typically referred to as sponsors). These sponsors are usually considered the management team which forms the SPAC entity to acquire or merge with a private operating company. Sponsors may include but are not limited to private equity or venture capital firms and asset managers with expertise and track record in identifying acquisition targets for shareholders. The sponsors will sometimes announce their intention (at IPO) to focus their search within a specific geographical region and/or industry to find a suitable acquisition target. Sponsors are typically entitled to sponsor's promote shares to increase their equity holdings in a SPAC. These shares are typically purchased at favourable terms (i.e. at minimal nominal sum) to incentivise sponsors for their risks taken in setting up a SPAC and acquiring a target company.
At least 90% of the gross proceeds raised at a SPAC listing must be placed in an escrow account. Under such escrow arrangement, funds are held by a third party (i.e. an independent escrow agent or financial institution licensed and approved by MAS). It is required to place, immediately upon the listing, at least 90% of a SPAC's gross proceeds raised in an escrow account which can only be drawn down in the event of a business combination, SPAC liquidation or other specific circumstances. Sponsors can only invest escrow account funds in approved investments (e.g. cash or cash equivalent short-dated securities). The utilisation of the funds in the escrow account will be primarily used for business combination.
As with all financial market investments, investing in SPACs
involves a certain level of risk. Here are some risks to take note
of before you start investing in SPACs.
More risks specific to a SPAC can be found in the IPO prospectus and/or shareholder circular of the respective SPAC listing.