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Hong Kong seen struggling to lure SPACs with strict rulebook

Bloomberg9/20/2021 08:23 PM GMT+08  • 5 min read
Hong Kong seen struggling to lure SPACs with strict rulebook
SPACs are empty shells when they go public, raising money with the intention of buying and merging with another company.
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Hong Kong could have a hard time attracting blank cheque companies after it proposed a high threshold to list in the city.

In a consultation paper released on Friday, Hong Kong Exchanges & Clearing proposed that special purpose acquisition companies would need to raise at least HK$1 billion ($170 million) when listing and that retail investors would be barred from participating. It also set an eligibility test for SPAC promoters, including having managed at least HK$8 billion for three years or possessing senior management experience at major listed companies.

The bourse has in the past been mired in scandals over shell companies and is now arguably taking the most careful approach to SPACs among major exchanges. Singapore and New York have no minimum fundraising size, but have a market capitalization requirement of US$112 million and of between US$50 million to US$100 million, respectively, according to the paper.

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