Daily Management Review

Its Second SPAC Start Trading In Singapore While A Third Is Set To Debut


Its Second SPAC Start Trading In Singapore While A Third Is Set To Debut
A day after Singapore’s first-ever SPAC, Vertex Technology Acquisition Corporation, started trading publicly on the city state’s exchange, a second blank check firm began doing the same on Friday.
Pegasus Asia's stock began Friday at $5.01 Singapore dollars, unchanged from the $5 Singapore dollar offer price. The initial public offering raised $170 million Singapore dollars ($126.27 million) in gross profits.
It is the first international-backed Singapore-listed special purpose acquisition company, with Tikehau Capital, a European asset manager, and Financière Agache, a holding company of Bernard Arnault, chairman, and CEO of French luxury conglomerate LVMH, as sponsors.
“We feel quite confident that we should be able to find the right acquisition,” Neil Parekh, CEO and non-independent director at Pegasus Asia said. 
At Tikehau Capital, Parekh is a partner and the head of Asia, Australia, and New Zealand.
To locate its target acquisition, he said the blank check company will focus on tech-enabled firms in areas such as financial, consumer, real estate, health, and digital services.
The Singapore Exchange announced guidelines last year that would allow SPACs to list on the main board of the exchange.
The SPAC must have a minimum market capitalization of $150 million Singapore dollars and must de-SPAC after 24 months, though corporations can request a 12-month extension if they meet specific criteria.
SPACs are shell corporations formed for the sole aim of merging with or acquiring an existing private company and bringing it public through an initial public offering. The process of taking a private firm public is known as de-SPACing.
Pegasus Asia claimed in a regulatory filing that "substantial interest" for the offering came from overseas funds, institutional investors, family offices, high-net-worth individuals, and retail investors.
Pegasus Asia's foreign offering included 29 million offer units, including 4 million units that Pegasus Asia can purchase back with a put option.
The 600,000 offer units in Singapore's public offer were 7.8 times oversubscribed, with 1,108 valid applications for 4.68 million units worth $23.4 million Singapore dollars as of Wednesday midday.
One new share and one-half of a warrant were included in each unit. A stock warrant permits an investor to buy a company's stock at a predetermined price and on a predetermined date.
The shares and public warrants will trade separately 45 days after the initial public offering, which is anticipated to take place on March 7.
When the Singapore Exchange released a consultation paper for SPACs, Pegasus Asia CEO Parekh indicated that asset management Tikehau Capital was already looking at a number of companies in the region that wanted to list.
“We had a chance to look at that very closely and contribute some ideas to that,” he said.
“The final rules came out and we felt the rules were very attractive, very good, balanced rules – guardrails to protect investors. At the same time, enough incentives for sponsors to do deals as well as for company founders to take advantage of going public through this route,” Parekh added.
The SPAC's joint issue managers were Citigroup and UBS.
Blank-check firms are gaining popularity in Asia, with an increasing number of sponsors based in the area.
Grab, one of Southeast Asia's most well-known companies went public in the United States through a SPAC deal.
Singapore wants to become a major Asian center for companies that write blank checks.