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Asian Legal Business News-Online - Reach Energy 'locks in cornerstones for IPO'
Malaysia's Reach Energy Bhd, a special purpose acquisition company (SPAC) with no existing assets, has locked in up to seven cornerstones for its 750 million ringgit ($236.93 million) IPO, two sources involved with the deal said.
The IPO could mark Malaysia's largest listing by a shell company with no assets. A SPAC is set up with the intention of buying firms that will be later folded into the business.
The cornerstone investors will take up about 150 million ringgit of the offer, the sources said. The cornerstones include pilgrim fund Lembaga Tabung Haji, CIMB Principal Asset Management, Hong Leong Asset Management and Malaysia's infrastructure firm MTD Capital, the sources added.
So-called cornerstone investors are important to the success of an IPO, allowing the underwriters to show potential institutional investors that the deal already has solid financial backing. In return, cornerstones receive preferential shares.
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