Singapore Exchange (SGX) announced Thursday new rules to allow special purpose acquisition companies (SPACs) to list on the mainboard, effective Friday.
A SPAC is essentially a “blank check” company, which raises funds in a public offering and seeks businesses or other assets to acquire later.
Tan Boon Gin, CEO of Singapore Exchange Regulation (SGX RegCo), said the exchange’s SPAC framework will provide companies with an alternative capital fund raising route with more certainty on pricing and execution.
“We want the SPAC process to result in good target companies listed on SGX, providing investors with more choice and opportunities. 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’ interest,” Tan said in a statement filed to SGX.
SGX’s framework includes SPACs having a minimum market capitalisation of S$150 million, and a requirement to make an acquisition within 24 months of the initial public offering (IPO), with a potential 12 month extension under certain conditions, the filing said.
Sponsors of SPACs must also subscribe to at least 2.5 percent to 3.5 percent of the IPO shares, units or warrants, SGX said.