Great exSPACtations - the advent of blank-cheque companies in Singapore

SPECIAL Purpose Acquisition Companies (SPACs) have taken the corporate world by storm. These blank-cheque shell companies, which raise funds in their initial public offerings (IPOs) to invest in potential but as yet unidentified target businesses, have fuelled a listing frenzy in the United States. SPAC IPOs have garnered US$87.9 billion in fundraising in the first three months of 2021, already exceeding last year's total.

Now, the focus has shifted to Asia - with potential targets, private equity players and investment banks clamouring for a similar framework. On the back of this excitement, the Singapore Exchange (SGX) has issued a consultation paper with a view to introducing SPAC listings by the end of the year, in the race to be the premier Asian venue for such IPOs.

While local markets clearly would like to replicate the US's success in Asia, another important motivator arises from continued arctic Sino-US relations: Chinese companies and Chinese money are looking for a neutral listing platform.