Zhaogang, a private equity-backed Chinese B2B steel-trading platform, is on course to become the first company to list in Hong Kong through a merger with a special purpose acquisition company (SPAC).
The company has agreed to merge with Aquila Acquisition Corp., a blank-check company backed by China Merchants Bank Co.’s overseas asset management arm. The deal values Zhaogang at about HK$10 billion ($1.3 billion).
The merger is expected to be completed in the fourth quarter of 2023. Once the merger is completed, Zhaogang’s shares will be listed on the Hong Kong Stock Exchange.
The SPAC listing is a new way for companies to go public in Hong Kong. SPACs are shell companies that raise money from investors with the intention of merging with a private company and taking it public.
The Hong Kong SPAC listing regime was introduced in December 2021. It is designed to attract more companies to list in Hong Kong and to make the process more efficient.
The Zhaogang SPAC merger is a significant development for the Hong Kong stock market. It is the first SPAC merger in Hong Kong and it is expected to pave the way for more companies to list in this way.
Here are some of the benefits of the Hong Kong SPAC listing regime for companies:
- It is a faster and more efficient way to go public than the traditional IPO process.
- It gives companies more control over the timing and terms of their listing.
- It allows companies to access a wider pool of investors, including institutional investors.
The Hong Kong SPAC listing regime is still in its early stages, but it has the potential to be a major boost for the Hong Kong stock market.
