[Controversial SPAC]② Mega SPACs Ignored... Negative Perception as 'Backdoor Listing Route'

No Companies Listed on KOSPI via SPAC Mergers in the Past Decade
Large Firms Prefer Direct Listing... "Perception That SPACs Are Lacking Something"

Although listings through SPACs (Special Purpose Acquisition Companies) are increasing, there are still no cases of large companies merging with SPACs for listing. Due to the avoidance by large companies, SPACs have not been able to shake off the perception of being a 'backdoor listing channel.'

According to the Korea Exchange on the 5th, NH SPAC 19 was designated as a management item on the 13th of last month as the deadline for submitting the preliminary listing examination for merging with an unlisted corporation expired.

If the reason for the management item designation is not resolved within one month from the designation date, it will be subject to delisting criteria. Therefore, if NH SPAC 19 does not submit the preliminary listing examination request for the SPAC merger by the 13th of this month, it will proceed to delisting. SPACs have a lifespan of three years, and if the preliminary listing examination is not requested six months before the expiration of the lifespan, they are designated as management items.

NH SPAC 19, which was listed on May 21, 2021, attracted attention as a large SPAC listed on the KOSPI market for the first time in 11 years. With a public offering amount reaching 96 billion KRW, it recorded the largest public offering scale among domestic listed SPACs. NH SPAC 19 was expected to be the first SPAC listed on the KOSPI market to successfully merge. Previously, Daewoo Securities Green Korea SPAC, Dongyang Value Ocean SPAC, and Woori SPAC 1, which entered the KOSPI market, failed to merge and were eventually liquidated.

NH SPAC 19 also considered merging with Oasis but ultimately failed. Initially, the investment prospectus specified 'small and medium-sized enterprises' as the target for the SPAC merger, but due to difficulties in finding a merger company, this clause was deleted in June last year. Subsequently, efforts were made to expand the scope of target companies for merger, but it has now reached the crossroads of delisting.

Mirae Asset Dream SPAC 1, which sought to list with a public offering size of 85 billion KRW last year, faced a setback but listed this year with a reduced public offering amount of 70 billion KRW. It boasted the largest scale among KOSDAQ-listed SPACs but recorded a subscription competition rate of 0.46 to 1, resulting in unsold shares. KB SPAC 24, a large SPAC that KB Securities attempted to list, launched a 40 billion KRW public offering in March but withdrew the listing after failing to attract demand. It tried again in June with a reduced public offering amount of 32 billion KRW but still failed to list.

Namjong Kim, a research fellow at the Korea Institute of Finance, pointed out, "It is regrettable that the public offering amounts of domestic SPACs are generally standardized at a medium scale, and relatively large SPAC listings and mergers are sluggish."

Unlike small and medium-sized SPACs that steadily list and actively merge, large SPACs struggle because companies of a certain scale tend to prefer direct listings. According to the Korea Exchange, there has not been a single case of a company listing on the KOSPI market through a SPAC merger in the past 10 years since 2014. A securities firm official said, "Companies of a certain size prefer direct listings over SPAC listings," adding, "There is also a concern that listing through a SPAC merger may imply some shortcomings compared to direct listing, which could create a negative perception, so they do not necessarily choose SPACs."

This content was produced with the assistance of AI translation services.