Vertex Spac Obtains Waiver of Rules Freezing Post-Merger Stock Transfers

SINGAPORE (THE BUSINESS TIMES) – Senior executives of special purpose acquisition company (Spac) Vertex Technology Acquisition Corp (VTAC) will be exempt from certain rules on the sale of their shares following a planned acquisition of a target company , the board of directors announced on Monday (January 17).

Spac – which is expected to start trading units on the Singapore Stock Exchange (SGX) this week – has updated its preliminary prospectus and clarified in a stock exchange filing that it will not be required to comply with certain listing rules which include moratorium requirements.

According to the filing, VTAC received a waiver from certain rules that prevent its founding shareholders and management, and their associates, from transferring or disposing of their interests during a standstill period immediately following the “de-Spac” business combination.

The waiver covers securities purchased on the secondary market by the sponsor, the management team and their associates, and also applies to the majority shareholders of the resulting company, their associates and executive directors who hold interests of at least minus 5%.

The waiver came as “there is sufficient alignment of interests obtained” in how the sponsor’s securities in the Spac will be converted into shares of the resulting company, the board said in its statement.

He added: “In other jurisdictions, standstill requirements after the initial business combination are not imposed by regulation or law and are generally determined by market forces and are subject to commercial negotiation only. between the parties involved.”

In the Spac model, an investment vehicle – here, VTAC, which is sponsored by Vertex Venture backed by Temasek – goes public with the aim of merging with a suitable company. The proceeds of the initial public offering are placed in escrow, pending the acquisition of a target by the sponsor.

But VTAC added on Monday that it plans to invest escrowed funds in Singapore government bonds and treasury bills, as well as bills issued by the Monetary Authority of Singapore (MAS).

The Board of Directors has noted that assets may be held either in cash or in permitted investments in the form of high quality short-term securities as cash equivalent.

Singapore treasury bonds and bills and treasury bills “each meet the liquidity requirement (since they can be liquidated by a sale in the secondary market) and are backed by a sovereign rated AAA or issued by the bank Central Singapore,” he told the stock exchange.

VTAC this month became the first Spac to file its final prospectus with the MAS. It will issue 11.8 million units at $5 each, including a public offering of 600,000 units in Singapore. Each unit consists of 1 share and 0.3 warrant per share.

Trading in the units is expected to begin trading on January 20, while the shares and warrants will begin trading separately on March 7.

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