Photographer: Paul Yeung / Bloomberg
Photographer: Paul Yeung / Bloomberg
Asian billionaires had just started checking companies, but now the SPAC boom is swelling on Wall Street.
After a frenzy in the listings of special purpose procurement companies – 326 have raised over $ 101 billion this year – the entire pipeline is now in the language due to exceeding regulations, including a number of offers from Asian investment firms and tycoons.
Gateway Strategic Acquisition Co., supported by procurement firm Gaw Capital councilors Ltd., Artisan Acquisition Corp., supported by New World Development Co. Adrian Cheng and Hony Capital Acquisition Corp. are some of the Asian SPACs waiting to appear in the US
All of them were submitted over two weeks ago, which means they can launch the initial public offering, but they haven’t done so yet. But they are waiting for the market sentiment to improve, according to people familiar with the matter, who are not allowed to speak in public and are asked not to be identified.
This week, the U.S. Securities and Exchange Commission put a damper on the SPAC party, presenting a new guarantee guideline, which are issued to early investors in transactions, may not be considered equity instruments and may instead be debt for accounting purposes. This threatens to stop submitting applications to companies without verification until the issue is resolved.
This is a bad time for Asian entrepreneurs. In addition to those awaiting launch, several SPACs are planned by Hong Kong’s richest real estate mogul Li Ka-shing, New Frontier Group Ltd., backed by Nan Fung Group, a China-focused capital company. private EmergeVest.
The latest moves by the ESA “undoubtedly mean that the clearing of ESA registrations of Asian SPACs (and indeed SPACs in other parts of the world) is likely to take longer, as the issuer considers their impact and addresses probably the related comments from SEC staff, ”said Thomas Vita, corporate finance partner at global law firm Norton Rose Fulbright.
Asian SPACs raised $ 3.1 billion this year, already surpassing the number of such transactions throughout 2020. Although still small, the rapidly expanding volume underscores the growing attractiveness of SPACs for business entrepreneurs in Asia. region.
Record Spree
Asian SPACs have already grown more this year than in 2020
Source: Bloomberg
A cooling on the SPAC market may not be bad news, given the bubble-like quality it has achieved.
“SPACs listed in the U.S. before the SEC recently lit amber did not 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 market frenzy, he added.
The US regulator has also warned candidates to register that structuring as a SPAC is not an end goal. avoid disclosing key investor information. In addition, SPACs no longer buzz as they once did, reaching even uniform levels. underperforms traditional IPOs.
“It will be interesting to see what happens in the US in terms of regulation. Regulators and Asian stock exchanges will be closely monitored, ”said Johannes Juette, a partner at law firm Clifford Chance.
– With the assistance of Vinicy Chan