Adrian Cheng’s SPAC is poised to raise up to US$345 million in New York listing, as one of Hong Kong’s wealthiest families joins the hottest fad in global finance

Cheng’s blank cheque company plans to raise up to US$345 million in Nasdaq listing
Hong Kong considering allowing SPACs to list in the city as it tries to tap hot fundraising trend

Banking & finance

Peggy SitoandChad Bray

Published: 9:54am, 25 Mar, 2021

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Adrian Cheng Chi-kong, the third-generation scion of one of Hong Kong’s wealthiest families and largest conglomerates, is poised to list a special purpose acquisition company (SPAC) in New York, joining the hottest fad to grip the global capital markets.

The blank cheque company, Artisan Acquisition Company, will raise up to US$345 million in an initial public offering on Nasdaq, according to a filing with the Securities & Exchange Commission. The transaction is being sponsored by one of Cheng’s companies, Artisan LLC.

Aspex Master Fund, a Hong Kong private investment fund, and Pacific Alliance Asia Opportunity Fund, a Hong Kong private-equity fund, are acting as anchor investors for the transaction, investing a combined US$60 million.

New World Development, at which Cheng serves as CEO and executive vice-chairman, declined to comment.

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The filing came as the SEC is reportingly seeking information from banks on a voluntary basis about SPAC fees and controls they have place regarding the blank cheque deals amid the SPAC frenzy, according to Reuters, citing sources.

Cheng is one of at least two wealthy families in Hong Kong jumping on the SPACs bandwagon, dubbed blank cheque companies for their business model of taking investors’ money for investing in almost anything, with little other than a time limit on putting the money to work as one of the only constraints.

As many as 128 SPACs have raised a combined US$38 billion in New York as of February, making it one of the latest fads in world finance since the explosive growth of cryptocurrencies. Bridgetown Holdings, backed by PayPal’s founder Peter Thiel and Hong Kong tycoon Li Ka-shing’s younger son Richard Li, is in talks to invest some of the US$595 million raised last October on the Nasdaq market in the Indonesian e-commerce giant Tokopedia.

The fad is coming closer to Hong Kong’s capital market, the world’s top destination for initial public offerings (IPOs) in seven of the past 12 years. Financial Secretary Paul Chan Mo-po last month instructed the city’s securities regulator and stock market operator to study the possibility of letting SPACs raise funds, adding to the raft of listing reforms since 2018 that allowed technology start-ups with multiple classes of shares and pre-revenue biotechnology research firms to list.

“The government has required the stock exchange and the regulator to study promoting SPACs to list in Hong Kong, in a bid to add in new fundraising channels, while at the same time to offer sufficient investor protection measures,” Chan said in a Bloomberg TV interview on March 2.

Still, Chan ordered regulators to uphold investor protection, insisting that the interest of investors should be the main consideration.

Credit Suisse and UBS are acting as bookrunners on the transaction.