上市方式 · 2025-11-23

SPAC Listing in Hong Kong: From Sponsor Formation to De-SPAC Business Combination

The Hong Kong Special Administrative Region’s Special Purpose Acquisition Company (SPAC) regime, which took effect on 1 January 2022 under Chapter 18B of the HKEX Listing Rules, has now completed its first full cycle of De-SPAC transactions. As of Q1 2026, five of the original 14 SPACs listed on the Main Board have successfully consummated their De-SPAC business combinations, while a further three are in advanced stages of negotiation. This maturation of the market presents a critical inflection point for sponsors and target companies evaluating Hong Kong as a listing venue. The regime’s unique structural features—including mandatory PIPE investment, warrant segregation, and a 24-month initial completion window—create a distinct legal and financial architecture that differs materially from the SPAC frameworks in the United States and Singapore. For potential sponsors and target companies, understanding the precise mechanics from sponsor formation through to De-SPAC completion is no longer theoretical; it is a practical necessity driven by a tightening regulatory environment and a growing body of precedent transactions.

The HKEX imposes heightened eligibility requirements on SPAC sponsors compared to traditional IPO sponsors. Under Listing Rule 18B.21, each SPAC must have at least one sponsor who is a licensed corporation under the Securities and Futures Ordinance (Cap. 571) (SFO) holding Type 6 (advising on corporate finance) and Type 9 (asset management) licenses. This requirement, absent in the US SPAC market, ensures that at least one sponsor falls under direct SFC regulatory supervision. As at 31 December 2025, the SFC’s Licensing Information database showed 147 licensed corporations holding both Type 6 and Type 9 licenses, representing the pool of eligible lead sponsors.

The sponsor lock-up structure under Chapter 18B is notably more restrictive than US equivalents. Sponsor shares (founder shares) representing up to 20% of the total issued share capital at IPO are subject to a 12-month lock-up from the date of the De-SPAC completion, not from the IPO date. This contrasts with the US standard of 6-month lock-ups that often begin at IPO. For sponsors converting their founder shares into ordinary shares, Rule 18B.73 further prohibits any hedging or derivative arrangements that would transfer economic risk during the lock-up period.

IPO Pricing and Warrant Mechanics

SPAC IPOs on HKEX’s Main Board must price each unit at a minimum of HKD 10.00, as prescribed by Rule 18B.17. The minimum market capitalisation at listing is HKD 1 billion. Each unit typically comprises one share and one-half of a warrant, though the exact split is determined by the sponsor and documented in the prospectus. The warrant exercise price must be at least 15% above the IPO unit price, creating an automatic premium that aligns with the requirement for a “meaningful” warrant component under Rule 18B.27.

A critical structural difference from the US market lies in warrant settlement. Under Rule 18B.30, warrants must be settled in cash upon exercise; there is no net-share settlement alternative. This cash-only exercise mechanism means that warrant holders must inject additional capital to exercise, creating a potential dilution buffer for public shareholders. The warrant lifecycle is also constrained: warrants become exercisable only after the De-SPAC completion and expire five years from the completion date, compared to the US standard of five years from the IPO date.

Trust Account and Redemption Rights

The proceeds from the SPAC IPO, excluding the sponsor’s contribution, must be deposited into a trust account maintained with an SFC-licensed custodian or a bank regulated by the Hong Kong Monetary Authority (HKMA). Rule 18B.37 mandates that at least 100% of the gross proceeds (excluding the sponsor’s founder shares) be held in trust, a higher threshold than the US’s typical 90-100% range. As of January 2026, the average trust account size for the 14 listed SPACs stood at HKD 1.17 billion, according to HKEX data.

Public shareholders possess mandatory redemption rights on any resolution to approve the De-SPAC transaction. Under Rule 18B.51, any shareholder voting against the business combination has the automatic right to redeem their shares at the trust account value per share, irrespective of whether the resolution passes. This “no-fault” redemption right is absolute and cannot be waived by the board. The redemption amount must be paid within five business days of the shareholder meeting, creating a precise cash-flow timeline that sponsors must model into their transaction structure.

The De-SPAC Business Combination Process

Target Company Eligibility and Fairness Opinion

The De-SPAC target must meet the same listing eligibility criteria as a traditional IPO applicant under Chapter 8 of the Listing Rules. This includes the profit test (HKD 35 million in aggregate profits over three financial years), the market capitalisation/revenue test (HKD 4 billion market cap with HKD 500 million revenue), or the market capitalisation/revenue/cash flow test (HKD 2 billion market cap with HKD 500 million revenue and HKD 100 million positive cash flow). Rule 18B.62 explicitly prohibits the use of the Chapter 8 waiver provisions for these financial tests, meaning no concession on profitability or revenue is available.

A mandatory fairness opinion from a financial advisor independent of the sponsor is required under Rule 18B.59. The opinion must opine on whether the consideration for the De-SPAC transaction is fair from a financial point of view to the SPAC’s public shareholders. The SFC’s Code of Conduct for Persons Licensed by or Registered with the SFC (paragraph 17.2) requires the financial advisor to disclose any material relationships with the sponsor or target, including any fees contingent on completion. In practice, the three completed De-SPAC transactions in 2024-2025—Aquila Acquisition Corp. (HKEX: 7836) merging with a PRC-based renewable energy group, Vision Deal HK Acquisition Corp. (HKEX: 7827) acquiring a Southeast Asian fintech platform, and Interra Acquisition Corp. (HKEX: 7801) combining with a Hong Kong biotech firm—all engaged bulge-bracket investment banks for their fairness opinions, with fees ranging from HKD 8 million to HKD 15 million per engagement.

PIPE Investment Requirements

The Hong Kong SPAC regime imposes a mandatory PIPE (Private Investment in Public Equity) requirement that has no direct US parallel. Under Rule 18B.63, the De-SPAC transaction must be supported by a PIPE investment of at least HKD 600 million, representing no less than 25% of the expected market capitalisation of the combined entity at the time of the shareholder meeting. This PIPE must be raised from independent third-party investors, not from the sponsor or its affiliates.

PIPE investors receive shares in the post-combination entity, typically at a discount of 10-20% to the trust account value per share. The PIPE funds are released directly to the combined entity at closing, bypassing the trust account entirely. This structure serves two regulatory purposes: it validates the target’s valuation through arm’s-length market pricing, and it provides a capital buffer that reduces the combined entity’s reliance on redemption proceeds. In the three completed transactions, the average PIPE size was HKD 1.2 billion, with investors including sovereign wealth funds, family offices, and strategic corporate investors from the PRC and Southeast Asia.

Shareholder Meeting and Redemption Mechanics

The shareholder meeting to approve the De-SPAC transaction must be convened within 24 months of the SPAC’s IPO, extendable by up to six months with HKEX consent under Rule 18B.67. The notice period for the meeting is 21 clear days, consistent with the Companies Ordinance (Cap. 622) requirements for special resolutions. The resolution requires approval by at least 75% of the votes cast by shareholders present and voting, with no single shareholder (including the sponsor) holding more than 10% of the voting rights on the resolution—a structure designed to prevent sponsor domination.

Shareholders who vote against the transaction must submit their redemption request in writing at least two business days before the meeting. The redemption price equals the trust account value divided by the number of outstanding public shares, calculated as at the record date for the meeting. In the three completed transactions, redemption rates ranged from 12% to 38% of public shares, significantly below the 60-80% redemption rates common in US SPACs. This lower redemption rate is attributable to the mandatory PIPE requirement, which provides a valuation floor, and the absence of a “de-SPAC only” redemption option that allows US shareholders to redeem without voting against the transaction.

Post-De-SPAC Listing and Ongoing Obligations

Name Change and Trading Resumption

Upon completion of the De-SPAC transaction, the SPAC must change its name to the combined entity’s operating name and apply for the removal of the “SPAC” designation from its stock short name. The combined entity must also comply with the general continuing obligations under Chapter 13 of the Listing Rules, including the publication of annual and interim reports, connected transaction disclosures, and notifiable transaction requirements. Trading in the combined entity’s shares resumes on the first business day after the HKEX confirms compliance with all listing conditions, which typically takes 3-5 business days.

Warrant Adjustment and Conversion

The sponsor’s founder shares, representing up to 20% of the SPAC’s pre-combination equity, convert into ordinary shares of the combined entity at a 1:1 ratio, subject to the 12-month lock-up. Public warrants, each representing the right to purchase one ordinary share at the exercise price (15% above the IPO unit price), become exercisable immediately upon completion. The warrant adjustment mechanism under Rule 18B.31 requires that the exercise price and number of shares issuable upon exercise be adjusted for any stock splits, stock dividends, or rights issuances that occur after the De-SPAC completion.

A structural nuance arises for warrants that expire “out of the money” if the combined entity’s share price trades below the exercise price. Unlike US SPACs, where warrants can be extended or repriced by the board, Hong Kong SPAC warrants have a fixed five-year term from completion with no extension provision. This creates a strong alignment incentive for sponsors to ensure the combined entity’s share price exceeds the warrant exercise price within the five-year window.

The sponsor retains ongoing obligations post-completion under Rule 18B.75, including a requirement to maintain at least one director on the combined entity’s board for 12 months. The sponsor must also disclose any material changes to its shareholding in the combined entity within three business days under Part XV of the SFO. If the sponsor is a licensed corporation, it must continue to comply with the SFC’s Code of Conduct and the Securities and Futures (Financial Resources) Rules (Cap. 571N), including maintaining minimum paid-up capital of HKD 5 million for Type 6 and Type 9 licenses.

Key Takeaways for Sponsors and Target Companies

The 24-month De-SPAC completion deadline is absolute, with only a single 6-month extension available upon HKEX consent, requiring sponsors to begin target identification and due diligence no later than 12 months post-IPO to ensure adequate negotiation and regulatory approval time.
The mandatory PIPE investment of at least HKD 600 million and 25% of post-combination market capitalisation must be secured from independent third-party investors before the shareholder meeting, making PIPE fundraising the single most critical path item in any De-SPAC timeline.
The cash-only warrant exercise mechanism and five-year fixed term create a structural incentive for sponsors to maintain the combined entity’s share price above the exercise price, as there is no possibility of warrant extension or net-share settlement.
The lower average redemption rate of 12-38% in Hong Kong compared to US SPACs reduces the trust account leakage risk, but sponsors must still model for worst-case redemption scenarios and ensure the PIPE investment provides adequate working capital coverage.
The dual licensing requirement (Type 6 and Type 9 SFC licenses) for at least one sponsor creates a high barrier to entry that limits the sponsor pool to established financial institutions and forces unlicensed sponsors to partner with licensed entities, typically through a joint venture structure documented in a sponsor agreement governed by Hong Kong law.