Burgundy Technology (BTAQ) Opts to Liquidate Trust

Burgundy Technology (NASDAQ:BTAQ) announced this afternoon that it would be opting to liquidate its trust effective as of the close of business on March 1.

BTAQ cited that it would be liquidating “due to its inability to complete an initial business combination within the time period required“.  Burgundy Technology will redeem all of its public shares that were included in the units issued in its IPO at a per-share redemption price of approximately $10.05. However, the warrants will expire worthless.

BTAQ noted that its tust had a balance of approximately $346,759,664, including around $34,664 in interest and dividend income, excess of cash over $346,725,000. The company expects to retain the interest and dividend income from the trust to pay dissolution expenses. Accordingly, there is expected to be a total of $346,725,000 available for the redemption of the 34,500,000 shares outstanding. Additionally, the sponsor has waived its redemption rights with respect to the outstanding founder shares and private placement shares.

Nonetheless, this is the first liquidation of 2022, following 2021’s liquidation of Yunhong International’s back in November. Yunhong International was led by Patrick Orlando, who is now the Chairman and CEO of Digital World Acquisition Corp. (NASDAQ:DWAC) and intends to combine with Trump Media & Technology Group.

Burgundy Technology initially priced it’s IPO in August of 2020 after downsizing 25% from $400 million to $300 million, shortening its timeline from 24 months to 18 months, and over-funding to 100.5%.  However, BTAQ did have the ability to extend it’s deadline beyond 18 months by contributing $0.033 per share each month to trust for a total of six months.

The SPAC intended to combine with technology companies that had potential to create compound growth and long-term value, but the current macro-environment has not been kind to companies in that sector. So, it appears that rather than extending it’s deadline by contribution and continuing to search for a target company, the Burgundy team opted instead to liquidate.

It remains to be seen if other SPACs will opt to do the same or continue to push on.