Morning Roundup: December 20, 2023
At the SPAC of Dawn
“Go north, young man” could be the new refrain for EV companies looking to growth as Canada this week passed a law requiring all new vehicles to be emissions-free by 2035.
The law, which mirrors the deadline set earlier by California and the UK in September, would require electric and hydrogen vehicles to make up 20% of all new car sales by 2026 and 60% by 2030, before completely phasing out internal combustion sales in 2035.
This could be a significant shot in the arm for EV de-SPACs, which have come under increased strain in a difficult supply chain and financing environment. Those with Canada-based production, like Northern Genesis‘ 2021 target LION Electric (NYSE:LEV) would stand to benefit even more as the law is designed to provide credits to local manufacturers maintaining supply within the market.
Many EV de-SPACs have tight clocks to get cars off the assembly line, however, as earlier delays have led to an industry-wide cash crunch (as linked below). Canada also does not have the scale to be the kind of game-changing market that, say, China could be. In fact, its population of about 38 million is roughly equal to that of California’s 39 million.
But, many US EV makers have focused their business models so squarely on meeting California requirements for incentives that the level of competition there may outweigh some benefits. More options in the UK and now Canadian markets should charge a few more batteries in the industry.
News and Rumors
- PR: EV scooter share platform Bird Global (OTC:BRDS) has filed for Chapter 11 bankruptcy and expects to complete a sale of its assets in the next 90-120 days. Market trends have been tough on the scooter share business model as fellow de-SPAC Micromobility.com (OTC:MCOM) was also de-listed from the Nasdaq today. Bird combined with Switchback II in November 2021 and Micromobility with GreenVision two months earlier.
- WSJ: Eighteen EV makers that went public between 2020 and 2022 are at risk of running out of cash before the end of 2024, including de-SPACs Nikola (NASDAQ:NKLA) and Fisker (NYSE:FSR), but also some startups that chose the IPO route.
International SPACs
- TheEdgeMalaysia: The last two Singapore-listed SPACs Pegasus Asia and Tellus Alpha have both reportedly signaled their intent to liquidate in an ill omen for the nascent SPAC scene in the country. Singapore nonetheless feted its first completed SPAC deal two weeks ago between livestreaming app 17Live and VTAC.
Non-Redemption Agreements
- GigCapital5, Inc. (NASDAQ:GIA) and QT Imaging, Inc. entered into separate agreements with certain of the public stockholders eligible to redeem their respective shares of common stock of GigCapital5 at the upcoming meeting. Pursuant to the agreements, the stockholders have agreed not to request redemption in connection with the extension with respect to the aggregate number of 1,359,229 shares of GigCapital5 Common Stock.
Liquidations
- Jupiter Acquisition Corp. (NASDAQ:JAQC) has terminated its combination with Filament Health after postponing a meeting for its shareholders to approve it. Jupiter will now redeem all shares on December 26 at $10.34 per share.
- Alpha Partners Technology Merger Corp. (NASDAQ:APTM) will redeem all of its outstanding Class A ordinary shares for $10.67, effective as of December 27. Because of the termination of its previously announced letter-of-intent, the board of directors has determined that it is in the best interests of the shareholders to liquidate and redeem all of the Class A Shares.
Scheduling Notes
- EG Acquisition Corp. (NYSE:EGGF) announced in a press release that its shareholders have approved its combination with private aviation firm flyExclusive, but both a closing of the transaction and an extension vote will be postponed until 1 pm ET, December 27.
- SK Growth Opportunities Corporation (NASDAQ:SKGR) has decided to postpone its extension meeting to December 27, at 12:00 p.m., Eastern Time to allow additional time for SK Growth to engage with its shareholders.
- On December 15, Roth CH Acquisition Co. (NASDAQ:USTC) convened a meeting, with the only proposal voted upon was to adjourn the meeting to December 19. On December 19, at the reconvened meeting, the Chairman decided not to proceed with the proposals to amend the agreement. As such, no matters were voted upon at the reconvened meeting and it was concluded.