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May 2022
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Malaysia’s securities regulator cuts minimum fundraising for SPAC IPOs, raises price

There were five SPAC listings since Malaysia introduced its SPAC framework in 2009
By Goh Thean Eu   
December 20, 2021

Malaysia’s securities regulator has cut the minimum amount that special purpose acquisition companies or SPACs are required to raise in an initial public offering to 100 million ringgit (US$23.75 million) from 150 million ringgit, and raised the minimum IPO price to 2 ringgit from 0.50 ringgit.

These are among the key revisions Securities Commission Malaysia (SC) has made to its 12-year-old framework for SPACs, and are aimed at promoting development of the local capital market.

The revised framework will take effect on January 1, the SC says in a statement on December 16.

SPACs, also known as blank check companies, are shell companies formed by a group of investors or sponsors that raise cash through an IPO and then acquire an existing firm.

The SC will now also allow SPACs to issue securities to acquire a qualifying target firm instead of having to pay all cash like before.

“The SC re-evaluated the SPAC framework to ensure it remains relevant and capable of spurring interest in listings and deals involving SPACs, thereby providing issuers with greater access to the capital market,” Chairman Syed Zaid Albar says in the statement.

There have been five SPAC listings in Malaysia since the framework was introduced in 2009. Only two managed to acquire an existing business within the three-year time frame set by the SC. The other three have been delisted for failing to comply with the rule.