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Re: None

Friday, 09/15/2023 8:46:54 PM

Friday, September 15, 2023 8:46:54 PM

Post# of 198726
How do public redemptions affect closing of SPAC?

SPAC shareholders have a right to redeem their shares in connection with the approval of a business combination, and in connection with a shareholder vote to approve an amendment to the SPAC’s charter to extend the time period for the SPAC’s completion of a business combination. In either case, the redemptions are funded from the SPAC trust account. As discussed above, SPACs will often raise PIPE investment in order to guard against the risk that redemptions will result in insufficient cash to close. However, in deals where closing depends on a meaningful amount of funds remaining in the SPAC trust account at closing (i.e., minimal redemptions), the shareholder redemption process is critical to the success of the deal and is often a driver for renegotiation of deal terms.