Interview | Mr. Zhang Xin: SPAC can be expected in the future

Due to the epidemic, uncertainty and other factors, SPAC financing methods have become a new favorite at the head of the capital market in recent years. In the first quarter of 2021 alone, the number of LISTINGS OF US stock SPAC has exceeded that of the whole year of 2020, and the number of SPAC listings has shown an exponential increase.

In this regard, FaFang had the honor to interview Mr. Zhang Xin, a senior partner of Beijing Deheng (Hangzhou) Law Firm, and invited him to talk about the characteristics of SPAC compared with the previous listing financing methods. Why stand out? What will SPAC bring to capital markets and legal practitioners?

Lawyer Zhang Xin

Senior Partner of Beijing Deheng (Hangzhou) Law Firm

-Master of Laws, Zhejiang University

-The Company is the head of the Securities and Derivatives Business Unit

-Member of the Securities Committee of Hangzhou Lawyers Association

-Hangzhou Lawyers Association "The Third Phase of Outstanding Young Lawyers Lead Flights" student

-Panorama entrepreneurship mentor

-Hangzhou Haichuang Park Entrepreneurship Counselor

Mr. Zhang Xin has been practicing in the capital markets field for more than 10 years, has extensive experience in providing legal services in domestic financial capital markets, and has served as PRC legal counsel in a number of corporate restructuring and initial public offering projects.

Q: We know that you have been practicing in the capital markets field for more than 10 years and have rich experience in providing legal services in the domestic financial capital markets, especially familiar with and proficient in the field of IPO. So, for SPAC, which has become more popular in recent years, what do you think are its significant advantages, or what are the factors that make it stand out?

Mr. Zhang Xin: Compared with the traditional IPO model, SPAC has the advantages of low listing threshold, short time consumption, low cost of fees and strong certainty of financing. In addition, SPAC's shell companies are relatively clean, and there is generally no historical risk, so it is very attractive to some private enterprises.

Q: What kind of changes do you think the SPAC model can bring to the current capital market?

Lawyer Zhang Xin: Under a series of uncertain market environment factors such as the epidemic, including policies, it has become more difficult for enterprises to list through traditional IPOs, including its scale and revenue. SPAC listing provides a relatively fast, efficient and deterministic way for private enterprises to list financing, and SPAC listing has some characteristics of combining public and private placement, providing a new choice for domestic enterprises with strong willingness to list.

According to the regulations of the United States on the listing of SPAC, SPAC investors have a right of redemption under certain conditions. Therefore, for the SPAC promoter, his assets have a certain degree of protection in the listing process. For the capital side, relatively speaking, their investment risk is low and the asset security is also stronger.

Q: With this change, what opportunities do you think Spac has brought to our legal practitioners? How can operators seize these opportunities?

Xin Zhang: SPAC provides a great opportunity for our lawyers, especially in the securities field, to expand their business. At the same time, with the listing of SPAC to meet the diversified needs of customers, lawyers will play an irreplaceable and important role in the entire SPAC process, whether it involves domestic and foreign countries or the grasp of domestic policies. Therefore, this will also put forward higher requirements for our lawyer practitioners.

Q: How do you feel about this SPAC event?

Mr. Zhang Xin: I am mainly engaged in the business of A-shares and Hong Kong stocks, and SPAC is also a relatively new field for me personally. I think through this event, we can be more familiar with some of the details of SPAC listing, including some of the latest regulatory policies in the United States, as well as some analysis and comparison of SPAC and traditional IPOs. In this way, we can give our clients more accurate advice, and as a law firm, we welcome SPAC training activities in this area, which is a very good learning and growth opportunity for all my lawyers who want to participate in SPAC business.

As a senior partner of the host law firm, Mr. Zhang Xin first spoke at the event, looking forward to the prospects and future of SPAC business, and introducing the relevant situation of Hangzhou, a new economic hot land. In the future, Fa Square will continue to cooperate with Mr. Zhang Xin and lawyers and corporate investors who aspire to go to SPAC Blue Ocean to embrace this new trend.