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SPACs take off in Asia

As our latest De-SPAC Debrief shows, 2021 was a banner year for US de-SPAC deals. Keen to foster their own SPAC ecosystems, both Singapore and Hong Kong have recently launched new regimes. Here, we round up the latest developments.


To date the Hong Kong Stock Exchange has received 11 listing applications, seven of which were handled by Freshfields (including the first by Aquila Acquisition Corporation)

In September 2021 Singapore became the first major Asian bourse to introduce a SPAC listings regime, closely followed by the Hong Kong Stock Exchange (HKEX) in January 2022.

January saw three SPACs list on the Singapore Exchange (SGX), which together raised around S$476m (US$385m). Singapore’s SPACs are expected to cast a wide net across the Asia Pacific region for acquisition targets, while the initial group of Hong Kong listing applications suggests their focus will primarily be on China (indeed, most Hong Kong SPACs have been capitalised by mainland Chinese investors).

Hong Kong rules set higher bar than other markets

Many aspects of Hong Kong’s regime are unique and considered tougher than those in other markets. For instance, only professional investors can subscribe to and trade in a SPAC’s shares before it merges with a target. At least 20 of those must be professional institutional investors, and the IPO is required to raise at least HK$1bn (c.US$128m). By contrast, Singapore has made SPACs available to small retail investors and has set its minimum valuation at lower at S$150m (c.US$110m).

To date the HKEX has received 11 listing applications, seven of which were handled by Freshfields (including the first by Aquila Acquisition Corporation). Freshfields Partner Arun Balasubramanian, who led the Aquila advisory team alongside fellow partners Grace Huang and Teresa Ko, said: ‘This was a very complex project executed under significant time pressure. We effectively developed a new commercial, execution and documentation framework in consultation with the HKEX and various intermediaries in parallel with the application itself.

‘Overall, the market has reacted positively to the new listing rules,’ he added. ‘Both the SGX and the HKEX offer global standards of regulation, execution and disclosure, which should provide assurance to SPAC investors, promoters and targets.’

Major investors look to seize SPAC opportunity

Looking ahead, the relative size and liquidity of the two markets suggests there is likely to be greater deal flow in Hong Kong. A number of well-known asset management, private equity and venture capital firms are already promoting Hong Kong SPACS, and it is expected that they will be able to draw on their deep sourcing and execution capabilities to find acquisition targets that will eventually be listed on the HKEX.

Market participants are aware that the HKEX does not permit ‘back door’ listings by companies that are not ready to go public. The focus therefore is on finding high-quality targets that meet the HKEX’s strict eligibility requirements and can go through an IPO-level due diligence and disclosure process.

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‘Both the Singapore and Hong Kong SPAC regimes should provide a natural listing alternative for emerging companies in South and Southeast Asia. Until now these companies have been targeting mergers with US-listed SPACs, which is currently a challenging route for Chinese companies in particular. Having two “close-to-home” SPAC markets for Asian companies is a positive development.’

Arun Balasubramanian

Hong Kong

Our team