Hong Kong's stock exchange is likely to ease its rules on special purpose acquisition companies, after taking in feedback from a market consultation that ended last week, the Sing Tao Daily reported, citing people familiar with the matter.
They said that a rule requiring at least 30 institutional investors out of at least 75 professional players would be eased, according to the report by the sister newspaper of The Standard.
Also known as blank-check companies, SPACs are shell firms that raise capital through an initial public offering and then use the cash to merge with a target private firm and take it public. They are usually established by private equity firms, high-profile hedge fund managers, billionaires and celebrities.
The bourse may also consider lowering the portion of funds to be raised from private investment in public equity, or PIPE, proposed at 25 percent in the consultation paper.
Also, SPAC investors who object to a merger between the blank-check and the target companies may be allowed to get back their investment and leave, the report said.
However, nothing has been finalized as yet, the people said.
Following the report, Hong Kong Exchanges and Clearing (0388) chief executive Nicolas Aguzin yesterday said in a virtual meeting that the bourse is reviewing the SPAC regime and that the listing mechanism will strike a balance between investor protection and attracting innovative companies.
Meanwhile, medical robot maker Shanghai MicroPort MedBot (2252) rose 6 percent to HK$45.8 on its first trading day, rebounding from a loss of over 8 percent. That translates into a paper gain of HK$1,300 for one board lot. The new shares once surged as much as 14 percent to HK$49.4.
In other PIO action, mainland household goods producer Better Home Group said it had received at least HK$52.31 million via margin loans, an oversubscription of 2.49 times for the retail part of its IPO, while retail investors poured at least HK$171 million into Beijing Capital Jiaye Property Services' IPO with margin financing, making the retail tranche 3.6 times oversubscribed.
The bourse is reviewing its proposed SPAC regime. REUTERS
