A blank-check company backed by China Merchants Bank Co’s overseas asset management arm has become the first to win approval for an initial public offering in Hong Kong, according to people familiar with the matter.
Aquila Acquisition Corp received the green light for a listing in the city on Thursday, the people said, asking not to be identified because the information is private. The special purpose acquisition company will seek to raise about US$300 million in the offering, one of the people said.
The funds will be used to buy a tech-enabled company in “new economy” sectors like green energy and life sciences, it said in a preliminary filing to the exchange website.
Hong Kong’s rulebook for blank-check companies was unveiled in December and came into effect on Jan. 1, months after its regional rival Singapore set the terms of its own, less stringent regime. Hong Kong’s exchange barred retail investors from buying shares in its spacs and imposed a fundraising threshold of HK$1 billion ($170 billion; US$128 million).
The spac roll-out comes at a difficult time for the Asian financial hub, as authorities struggle to cope with a runaway Covid-19 outbreak that threatens to bring the city and its economy to a standstill. Authorities plan to conduct a round of compulsory testing of the entire population three times in March, and have pledged to extend strict social distancing rules through late April.
A global slowdown in IPOs has been exacerbated in Hong Kong by China’s crackdown on everyone from technology giants to debt-laden property developers, wiping out more than US$1.5 trillion of companies’ market value last year. Hong Kong Exchanges & Clearing reported its worst quarterly earnings in two years. The bourse dropped out of the global top three IPO venues last year.
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Other blank-check companies that have filed in Hong Kong after Aquila include a vehicle backed by an affiliate of private equity firm Primavera Capital and Chinese-owned investment bank ABC International Holdings, and a spac promoted by former Chinese gymnast and entrepreneur Li Ning, LionRock Capital and Astrapto Capital.
Morgan Stanley and CMB International Capital Corp. are joint sponsors of Aquila’s offering, the filing showed.
CMB International Asset Management didn’t immediately respond to requests for comment by phone or email. A representative for Hong Kong Exchanges & Clearing declined to comment on individual companies.
Photo: Bloomberg
