SPACs stands for
Special Purpose Acquisition Companies. These are often called “blank cheque” companies because they have no commercial operations and are formed strictly to raise capital through initial purpose offering (IPO). The SPAC will either acquire or merge with an existing company once a company has been identified.
Last year, the popularity of SPACs have soared and you have seen many SPACs listed on the US stock exchanges.
The advantages of SPACs over traditional IPOs are lower transaction fees and shorter timeline to become a public listed company.
Singapore SPACs
If you like to invest in SPACs, you will be happy to know that SPACs have been allowed to list on SGX Mainboard effective 3 September 2021 with the following rules.
- Minimum market capitalisation of S$150 million.
- De-SPAC must take place within 24 months of IPO with an extension of up to 12 months subject to fulfilment of prescribed conditions.
- Moratorium on Sponsors’ shares from IPO
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