The Securities and Exchange Commission is sounding the alarm about blank-check companies again. It seems that, in their haste to get to market before it goes bust, SPACs aren’t just being slapdash with their SEC filings, but also with their accounting procedures.
SPACs have typically classified the warrants on their balance sheets as equity. Under certain circumstances, they should be classified as liabilities, which would require the company to periodically account for changes in the warrants’ value, the Securities and Exchange Commission said in a statement released late Monday. One impact of the SEC’s announcement: SPACs that are affected would have to restate their financial results if the fluctuations are deemed to be material, the SEC said.
So how has the SPAC industry responded to this latest threat and demonstration of the perils of pursing speed at all costs? Why, with the largest-ever blank check deal, for the Uber of Southeast Asia, itself a mere amuse bouche to whet the appetite of the still largely untapped Asian SPACortunity.
Grab Holdings, the largest ride-hailing and food delivery firm in Southeast Asia, clinched a merger on Tuesday with special-purpose acquisition company Altimeter Growth Corp securing a valuation of nearly $40 billion and paving the way for a coveted U.S. listing…. As part of Singapore-based Grab’s agreement with the SPAC backed by Altimeter Capital, investors such as Temasek Holdings, BlackRock, Fidelity International, Abu Dhabi’s Mubadala and Malaysia’s Permodalan Nasional Bhd will participate in a $4 billion private investment in public equity offering….
The deals for Grab, which was valued at just over $16 billion last year, are a big win for its early backers such as SoftBank Group Corp and China’s Didi Chuxing.
The multinational company, which owns Geely Automobile Holdings Ltd., Volvo Car Group and several other electric-vehicle brands, is in talks to sponsor a special-purpose acquisition company that could raise $300 million in a Nasdaq initial public offering… Separately, Polestar, a Swedish electric-vehicle maker owned by Volvo Cars and Geely, is considering going public in the U.S. through a different SPAC in a transaction that could value the business at as much as $40 billion, the people familiar with the matter said. If achieved, it would be one of the most valuable SPAC mergers.
Singapore’s Grab to go public in world’s biggest $40 billion SPAC merger [Reuters]
Chinese Auto Giant Geely Explores SPAC Deals [WSJ]
Regulators Step Up Scrutiny of SPACs With New View on Warrants [WSJ]
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