Singapore to let blank cheque companies raise funds starting on September 3, beating Hong Kong to the punch with SPACs

Name: SPACs: Everything you need to know about the finance world’s new big thing
Uploaded: 2021-09-02T07:54:08.000Z
Duration: 3 min 34 s
Description: SPACs: Everything you need to know about the finance world’s new big thing

Blank-cheque companies will be required to have a market cap of US$112 million, while sponsors will have to hold shares for longer

Hong Kong’s stock exchange also considering rule changes to allow SPACs to list

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The new rules come more than a decade after Singapore first considered greenlighting SPAC initial public offerings, but shelved the plan following a public consultation. Photo: EPA

Chad Bray

Published: 3:54pm, 2 Sep 2021Updated: 11:26pm, 2 Sep 2021

Singapore said on Thursday that it would allow special purpose acquisition companies (SPACs) to go public on its bourse starting Friday, as the city state hopes to become the go-to market in Asia for what has been one of the hottest fundraising trends globally in the past 18 months.

The so-called blank-cheque companies have raised more than US$122 billion this year alone, primarily through listings in the United States. However, they have proven to be popular with Asian sponsors and target companies, prompting a race between Hong Kong and Singapore to see who would be the first to offer listings for these investment vehicles.

“We want the SPAC process to result in good target companies listed on SGX [Singapore Exchange], providing investors with more choice and opportunities,” Tan Boon Gin, CEO of Singapore Exchange Regulation (SGX RegCo), said in an announcement on Thursday. “To achieve this, you can expect us to focus on the sponsors’ quality and track record. We have also introduced requirements that increase sponsors’ skin in the game and their alignment with shareholders’ interests.”

SGX RegCo is a unit of the city’s bourse operator.

The new rules come more than a decade after Singapore first considered greenlighting SPAC initial public offerings, but shelved the plan following a public consultation. High-profile collapses in Malaysia and South Korea, as well as regulatory concerns about protecting retail investors, have slowed the acceptance of SPAC listings in Asia in the past.

03:34

SPACs: Everything you need to know about the finance world’s new big thing

These takeover vehicles do not have any existing businesses, but are created purely to raise financial war chests and buy assets within a specified period of time, usually 18 months to two years.

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