Southeast Asia Cautiously Enters A SPAC -tacular Era.
Legal News & Analysis - Asia Pacific - ASEAN - Corporate/M&A
27 January 2021
Morrison & Foerster partners Ruomu Li and Lip Kian Ang were quoted in the article “Southeast Asia cautiously enters a SPAC-tacular era” by The Ken that discusses how special purpose acquisition companies are turning towards Southeast Asia.
The purpose of a SPAC is to merge with or acquire a business and take it to IPO. SPACs often offer a faster and more efficient route to going public. “If the amount of funding required by the target company exceeds the capital raised by the SPAC, the sponsors – owners of the SPAC – will help gather the additional money via PIPEs by tapping into their vast business networks. This is a privately negotiated investment based on the merged entity’s valuation. In a traditional IPO, companies have to find such investors themselves, said Ruomu Li, a Shanghai-based partner at international law firm Morrison & Foerster.”
"'For innovative businesses, which include tech companies in Southeast Asia that do not have publicly-listed peers, this could make SPACs more attractive compared to a traditional IPO, where public investors may find it challenging to evaluate the IPO price when there is no comparable business in the public markets to benchmark against,' said Lip Kian Ang, a Singapore-based partner.”
Ruomu Li, Partner, Morrison Foerster