King & Wood Mallesons (KWM) advised Vision Deal HK Acquisition Corp. (Vision Deal, HK Stock Code: 7827 and Warrant Code: 4827) on its De-SPAC transaction involving a business combination with target Quwan Holding Limited (Quwan), marking Hong Kong’s first-ever dual track De-SPAC transaction. The transaction was signed and announced on December 8, 2023.
This novel transaction will involve the simultaneous disposal of 4.32% target existing shares to the SPAC as part of the De-SPAC transaction, at the same time effecting and completing the merger. As opposed to a traditional Hong Kong IPO where a selling shareholder can typically dispose of sale shares at the IPO price, here, certain target shareholders can dispose of some of their shares to the SPAC at a valuation different from the merger consideration, which is unprecedented in the De-SPAC market.
A total of HK$576 million PIPE investment amount has currently been committed, with a unique incremental mechanism designed to upward adjust to a maximum of HK$610 million depending on the final redemption rate and target negotiated value.
Vision Deal is a SPAC listed in June 2022 and was the second Hong Kong SPAC listing. On completion, Vision Deal will merge with Quwan and become its subsidiary, and Vision Deal’s listing status will be withdrawn. Quwan, an ongoing Hong Kong IPO listing applicant which renewed its listing application in June 2023, will become the successor company to be listed on the Hong Kong Stock Exchange via the dual track De-SPAC transaction.
Quwan is a leading interest-driven mobile social platform in the PRC. In 2022, Quwan was the largest mobile voice-based social network platform and the largest mobile gamer-based social network platform in the PRC.
KWM’s cross-border and cross-practice team that advised Vision Deal is led by KWM Hong Kong ECM partner John Baptist Chan with support from Carlton Ng and Elaine Ng as to Hong Kong legal aspects of the De-SPAC transaction, Alan Wong and Elaine Ma as to PIPE investment, and Nathaniel Lau and Clara To as to listing compliance matters. KWM International partners Xinghua (Owen) Wang and Jiaxing (Jason) Xu advised on M&A-related transaction documents.
In addition, Hong Kong ECM partner Corey Zhang advised on US aspects of the De-SPAC transaction, and Hong Kong Banking & Finance partner Angus Sip advised on regulatory issues involving warrants.
Any reference to "Hong Kong" or "Hong Kong SAR" shall be construed as a reference to "Hong Kong Special Administrative Region of the People's Republic of China".
