Location: TSX Company Manual > Part X Special Purpose Acquisition Corporations (SPACs) > B. Original listing Requirements > Capital Structure > Sec. 1008.

Capital Structure Prohibition of Debt Financing

Sec. 1008.

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(2 versions)
 
Dec 19 2008 - Oct 3 2018Oct 4 2018 onwards

A SPAC seeking listing on the Exchange must satisfy all of the criteria below:

(a) the security provisions must contain:
(i) a redemption (or substantially similar) feature, pursuant to which shareholders (other than founding securityholders in respect of their founding securities) may, in the event such qualifying acquisition is completed within the time frame set out in Section 1022, elect that each share held be redeemed for an amount at least equal to: (1) the aggregate amount then on deposit in the escrow account (net of any applicable taxes and direct expenses related to the exercise of the redemption right), divided by (2) the aggregate number of shares then outstanding, excluding founding securities and
(ii) a liquidation distribution (or substantially similar) feature, pursuant to which shareholders (other than the founding securityholders in respect of their founding securities) must, if the qualifying acquisition is not completed within the permitted time set out in Section 1022, be entitled to receive, for each share held, an amount at least equal to: (1) the aggregate amount then on deposit in the escrow account (net of any applicable taxes and direct expenses related to the liquidation distribution), divided by (2) the aggregate number of shares then outstanding excluding the founding securities.
Notwithstanding the foregoing, the SPAC may establish a limit as to the maximum number of shares with respect to which a shareholder, together with any affiliates or persons acting jointly or in concert, may exercise a redemption right, provided that such limit (i) may not be set at lower than 15% of the shares sold in the IPO; and (ii) is disclosed in the IPO prospectus. For greater certainty, any redemption limit established by a SPAC must apply equally to all shareholders entitled to a redemption right.
Exchange discretion with respect to the requirements of this Subsection may only be exercised after discussions with, and the concurrence of, the OSC.
(b) in addition to Section 1008(a) where units are issued in the IPO:
(i) the share purchase warrants must not be exercisable prior to the completion of the qualifying acquisition;
(ii) the share purchase warrants must expire on the earlier of: (x) a date specified in the IPO prospectus and (y) the date on which the SPAC fails to complete a qualifying acquisition within the permitted time set out in Section 1022; and
(iii) share purchase warrants may not have an entitlement to the escrowed funds upon liquidation of the SPAC.

Capital Structure Prohibition of Debt Financing

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