SC revises SPAC framework

20 January 2022

On 16 December 2021, SC announced that it has revised the special purpose acquisition company (“SPAC”) framework contained in the Equity Guidelines to facilitate greater access to fundraising in Malaysia. The review of the SPAC framework is in line with the Capital Market Masterplan 3’s aspiration to create a capital market that is relevant, efficient and diversified.

Among other things, the revisions will:

• enable business combinations via issuance of securities as consideration for the qualifying acquisition (“QA”). Currently, SPACs may only meet the QA requirement by way of cash acquisitions;
• broaden the avenue for SPACs to obtain additional financing by allowing private placements for QA. In addition, the minimum amount of funds required to be raised by a SPAC through its initial public offering (IPO) has been reduced from RM150 million to RM100 million;
• allow professionals with extensive experience in private equity and venture capital with asset sourcing and deal making experience to steer SPACs. This could potentially broaden the target asset universe and spur mergers and acquisitions by Malaysian corporations; and
• reduce the threshold for shareholders’ approval of the QA from a special resolution of at least 75% majority to a simple majority approval by all shareholders present and voting.