SPACs Special Purpose Acquisition Companies
Special Purpose Acquisition Companies (SPACs) have grown again in popularity across the market and TISE has Listing Rules which enable an efficient and cost-effective solution on an internationally recognised, regulated market.
Key Benefits » Accessible minimum requirements » Flexible custody arrangements » 36-month timeframe to make the QA
Our Listing Rules are also very attractive because they enable issuers to obtain upfront investor consent through the detail of the Listing Document, they permit dual share class structures and founder shares, and they do not require a suspension of dealings on announcement of the Qualifying Acquisition.
|Minimum market capitalisation||£1,000,000 or as otherwise agreed|
|Custody arrangements||Funds to be held in Escrow or otherwise as agreed. Capital raised less operating costs|
|Working capital||Must not exceed requirements over 12 months unless shareholder approval|
|Listing document approval||Exchange approval|
|Management team shareholding||Disclosure of interests; minimum 12 month lock-in post QA|
|Permitted timeframe for QA||36 months|
|Investment policy||Sufficiently detailed to allow adequate investor assessment|
|Acquisition approval||None unless differs to that defined within the listing document|
|Accounting requirements||Annual & where prepared, interim|
|Fees (based on 1 issuer and 1 class)||Initial £6,000 / Annual £2,500|
|Announcement of QA||Must be made within 3 business days; no requirement for suspension of dealings|
|Suspension||First day after 36 months for QA|
|Liquidation||Special resolution for voluntary liquidation|
|Distribution||Within 60 days following from end of 36 months for QA (to shareholders, pro-rata)|
|Delisting||Suspended for distribution, then delisted|
Why a SPAC?
A SPAC is a cash shell which is used to raise money for a very specific objective. It is well suited to industries where there is an unknown element of risk associated with the target assets. A SPAC allows capital to be raised within a structure where investors and owners of the assets can receive shares in a transparent, listed vehicle which can react quickly to investment opportunities.
A SPAC can resemble an investment fund. However, the costs associated with establishing a SPAC are generally lower than those applicable to a fund. For example, a SPAC does not require a fund management company to be established, which saves time and cost. In addition, a SPAC’s investment policies and objectives are not intended to achieve a spread of risk.
Their nature also means that – more than ever – investors are placing their faith in the management, which will usually sit on the board of directors of the listed SPAC and who will be incentivised through holding a minority shareholding in the SPAC.
TISE's Listing rules – more detail
TISE has Equity Market Listing Rules for listing the equity of trading companies and investment vehicles which might be utilised by the enlarged group once the SPAC has made its QA if there is a demand to retain a listing.