Recently, among those engaged in financial technology, "large SPACs (Special Purpose Acquisition Companies)" have garnered attention as investment products that can yield returns similar to "deposits + α." It has been analyzed that purchasing SPACs, which are expected to be liquidated after failing to merge, at reasonable prices can provide higher interest than deposits, which has attracted investment funds.
SPACs, which are publicly listed for the sole purpose of merging with private companies, must complete such mergers within three years of listing. However, as the Korea Exchange has tightened listing reviews and the Financial Supervisory Service has imposed strict standards on securities registration statements, there have been repeated failures in SPAC mergers due to investor opposition. When SPACs fail to merge, they distribute the cash they hold to shareholders upon liquidation. It appears that large SPACs are becoming a less favorable option for those seeking "low-risk, moderate returns."
Last year, the shares of Hana Financial 25 SPAC, which attempted to merge with the glass substrate-related company PIE but failed, as well as Samsung SPAC 7 and 8, and Mirae Asset Dream SPAC 1 have recently risen to levels above their initial public offering prices.
These large SPACs, which have raised more than 40 billion won, have attracted interest as "mega SPACs" capable of merging with sizable private companies. However, the shift in atmosphere occurred as the exchange, promoting the value-up of the Korean stock market, raised the thresholds for listing reviews.
An industry insider noted, "In the past, there were so many sponsors for SPACs that one could say they were lining up, but these days, that is not the case." Especially for large SPACs, voices have emerged expressing that it is challenging to find willing sponsors, complicating their search for merger targets.
Securities firms also hindered public offerings by promoting high SPAC deposit interest rates. Samsung SPAC 7 had a deposit interest rate in the 4% range until last year and is currently at 3.3% annually. Hana Financial 25 SPAC also offers a deposit interest rate of 3.2%. Amid a backdrop where the average 1-year deposit rate in banks has fallen below 3%, investors seeking even slightly higher rates are focusing on SPACs.
Since SPACs return the full principal amount at the time of liquidation, investors can ensure their principal is protected. Because of this, not only individual investors but also institutional investors are actively engaging in SPAC investments. KB Securities has acquired more than 5% and 9% stakes in Samsung SPAC 7 and Hana Financial 25 SPACs, respectively.
As SPACs gain attention as investment havens in the low-interest era, there are rising discussions regarding the irrelevance of large SPACs. Concerns are also echoed about the related market being in a stagnant state due to poor merger performance by large SPACs. In the event that a SPAC fails to merge and is liquidated, the sponsors must bear all expenses incurred throughout the SPAC listing to liquidation process.
A securities firm representative stated, "In the past, it could be expressed that there was a line of sponsors eager to participate in SPACs, but these days, that's not true." They particularly mentioned that it has become difficult to find sponsors willing to engage in large SPACs.
However, as the focus of the domestic stock market's value-up policy is on eliminating distressed corporations, analysis suggests that the size of SPACs will grow in the long term.
A representative of a small to medium-sized securities firm remarked, "Given the Korea Exchange's announcement of policies to facilitate the delisting of distressed corporations, it could be calculated that small companies with market caps of around 10 billion won might be removed from the stock market sooner than expected." They added, "Considering the value-up policy that the exchange is pursuing, it makes sense for SPAC sizes to increase." This representative explained that although there are no clear guidelines, recent securities firms are considering companies with revenues of 20 billion won for SPAC mergers if they exhibit high growth potential and those with 30 billion won if they are deemed to lack growth potential.