A general view shows the Singapore Exchange (SGX) stock exchange building in Singapore’s central business district on April 7, 2020, as the country ordered the closure of all businesses deemed non-essential as well as schools to combat the spread of COVID -19 novel coronavirus.
ROSLAN RAHMAN | AFP via Getty Images
SINGAPORE — A second blank check company began trading on the Singapore Stock Exchange on Friday, a day after the IPO of Vertex Technology Acquisition Corporation — the city-state’s first-ever SPAC.
Shares of Pegasus Asia opened Friday at 5.01 Singapore dollars, little changed from the offer price of 5 Singapore dollars. The company raised 170 million Singapore dollars ($126.27 million) in gross proceeds from the IPO.
It is the first special purpose acquisition company listed in Singapore with international backers – its sponsors include European asset manager Tikehau Capital and Financière Agache, a holding company of Bernard Arnault, Chairman and CEO of the French luxury group LVMH.
“We are absolutely confident that we should be able to find the right acquisition,” Neil Parekh, CEO and non-independent director of Pegasus Asia, told CNBC’s “Street Signs Asia” on Friday.
Parekh is also a partner and head of Asia, Australia and New Zealand at Tikehau Capital.
He said the blank check company will focus on technology companies in areas including fintech, consumer, real estate, healthcare and digital services to find its target acquisition.
Last year the The Singapore Stock Exchange has announced rules this would allow SPACs to register on the main board of the exchange.
According to the rules, the SPAC must have a minimum market capitalization of S$150 million and a 24-month deadline to de-SPAC – although companies can apply for a 12-month extension if they meet certain requirements.
SPACs are shell companies created to raise funds through an initial public offering, for the sole purpose of merging or acquiring an existing private company and taking it public. De-SPACing is the process of taking a private company public.
In one regulatory filing, Pegasus Asia said its offering had attracted “significant demand” from international funds, institutional investors, family offices, high net worth individuals and retail investors.
Its international offering included 29 million units offered, including 4 million units overallocated to investors that Pegasus Asia can repurchase with a put option.
Singapore’s public offering of 600,000 offering units was oversubscribed 7.8 times – at its close Wednesday midday there were 1,108 valid requests for 4.68 million units worth 23.4 million Singapore dollars.
Each unit consisted of one new share and half a warrant. A stock warrant allows an investor to buy shares of a company at a specific price and date.
The shares and public warrants are expected to trade separately 45 days from the listing date, which is expected to be March 7.
Pegasus Asia CEO Parekh told CNBC that asset manager Tikehau Capital is already looking at a number of companies in the region that want to list when the Singapore Stock Exchange published a consultation document for SPACs.
“We had the opportunity to take a very close look at this and bring some ideas to it,” he said.
“The final rules are out and we felt the rules were very attractive, very good and balanced – safeguards to protect investors. At the same time, enough incentive for sponsors to make deals as well as for company founders to take advantage of IPO through this route,” Parekh added.
Citigroup and UBS were joint issue managers within the SPAC.
Growing interest in SPACs
There is growing interest in blank check companies across Asia – with a increasing number of sponsors based in the region.
One of Southeast Asia’s largest companies, Grab, went public in the United States through a SPAC deal.
Singapore intends to position itself as a major Asian hub for blank check companies.
On Thursday, Vertex Technology Acquisition Corporation became the first blank check company to begin trading on the Singapore Stock Exchange. SPAC is sponsored by Vertex Venture Holdings, a wholly owned subsidiary of public investor Temasek Holdings.
VTAC rose 1% from its offer price of 5.05 Singapore dollars on Thursday – the stock opened at a high of 5.25 Singapore dollars before paring gains.
A third SPAC called Novo Tellus Alpha Acquisition filed its prospectus on Thursday with the Singapore Stock Exchange and plans to start trading on January 27.