Photographer: Paul Yeung / Bloomberg
Photographer: Paul Yeung / Bloomberg
Asian billionaires had only just begun to switch to blank check companies, but now the SPAC boom is deflated on Wall Street.
After a frenzy of listings of special-purpose acquisition companies (326 have raised more than $ 101 billion this year), the entire pipeline is now at a limit due to regulatory scope, including several bids for Asian magnates and investment firms.
Gateway Strategic Acquisition Co., with the support of purchasing firm Gaw Capital Advisors Ltd., Artisan Acquisition Corp., supported by Adrian Cheng of New World Development Co. and Hony Capital Acquisition Corp., are some of the Asian SPACs waiting to be listed in the United States.
They all showed up more than two weeks ago, meaning they can launch the initial public offering, but they haven’t done so yet. But now they are waiting until market sentiment improves, according to people who know the subject, who are not allowed to speak publicly and ask not to be identified.
This week, the U.S. Securities and Exchange Commission launched a shock absorber to the SPAC party the new guidelines that ensure that warrants, issued to initial investors in transactions, may not be considered equity instruments and may instead be liabilities for accounting purposes. This threatens to interrupt the requests of blank verification companies until the issue is resolved.
It’s a bad time for Asian entrepreneurs. In addition to those awaiting release, more SPACs are being planned by renowned Hong Kong real estate mogul Li Ka-shing, New Frontier Group Ltd., with support from China-centered Nan Fung Group and the signing of private capital EmergeVest.
Recent SEC moves “certainly mean that clearing SEC SEC filings for Asian SPACs (and indeed SPACs from anywhere else in the world) is likely to take longer as the issuer considers its impact and address possible related comments from SEC staff, ”said Thomas Vita, corporate finance partner at global law firm Norton Rose Fulbright.
Asian SPACs have raised $ 3.1 billion this year, surpassing the count of these offerings throughout 2020. While still small, the volume of rapid expansion underscores the growing attraction of SPACs to business entrepreneurs in the UK. region.
Record Spree
Asian SPACs have already raised more this year than in all of 2020
Source: Bloomberg
A cooling in the SPAC market may not be bad news, given the bubble quality it had obtained.
“SPACs that have appeared in the U.S. before the SEC recently flashed amber light don’t necessarily have the advantage of the first engine over aspiring Asian sponsors and promoters,” said Robson Lee, a partner at Gibson Dunn. The increase in the number of SPAC listings in the US does not guarantee successful mergers with viable target companies and appears to be a phenomenon of market frenzy, he added.
The US regulator had also warned the list of candidates that structuring as a SPAC is not an end in itself. avoid disclosing key information to investors. To top it off, the SPACs no longer joke like they used to, reaching for equity they perform less well than traditional IPOs.
“It will be interesting to see what happens in the US in the regulatory plan. Asian regulators and stock exchanges will be watching closely, ”said Johannes Juette, a partner at law firm Clifford Chance.
– With the assistance of Vinicy Chan