Challenges in SPAC land


Dateline 2014-06-14, The Star:

HOW much control should Special Purpose Acquisition Companies (SPACs) exert over the assets they acquire? This is a question that is increasingly becoming a moot point with listed SPACs.

Here’s one indication of this: According to sources, Reach Energy Bhd, the oil and gas SPAC seeking a listing on Bursa Malaysia, has tweaked one the clauses in its prospectus relating to control over the assets it hopes to buy. It has now stipulated that it will seek to secure majority control over the assets it buys into.

Apparently this was done to ensure there was no confusion in this area going forward.
SPAC guidelines from the start, had a very strict view on this matter. The rules initially required SPACs to secure both majority ownership and management control over the assets they buy. Subsequently, the rules were loosened after taking into consideration the dynamics of certain industries such as the minerals and resources industry that includes oil and gas.

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This entry was posted on Thursday, August 14th, 2014 at 6:00 am and is filed under Malaysia, oil and gas. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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