The Securities and Exchange Commission of Pakistan (SECP) amended its 2017 IPO rules to provide a regulatory framework for Special Purpose Acquisition Vehicles (SPAC).
The launch of SPAC in the Pakistani market is expected to improve the efficiency of the primary market, stimulate new listings and help companies raise capital for large-scale mergers and acquisitions. It also allows investors / the public to co-invest with advanced and experienced managers and benefit from the increase in the value of the shares acquired in the units acquired.
According to the proposed regulatory framework, SPACs should be a public limited liability company with a paid authorized capital of at least Rs. 10 million. SPAC promoters / sponsors, managers and CEOs must comply with relevant Regulations of SECP/SBP.
In order to protect the interests of shareholders, SPAC must keep 90% of the funds raised as a result of the IPO in deposit with the custodian. These funds can only be used for mergers or acquisitions within the permitted duration of three years.
Each merger or acquisition of shareholders is approved by a special resolution.
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