HL Acquisitions Corp. Announces Combination
by Kristi Marvin on 2019-12-17 at 8:27pm

The month of December has been thick with deal announcements so far and it doesn’t appear to be slowing down any time soon.  Tonight, to add to the tally, HL Acquisitions Corp. (HCCH) announced their combination with Chi Energie (Singapore) PTE Ltd.

Chi Energie, which is developing a modular LNG business to supply the remote power, oil field service and transportation sectors in Oman, will become a wholly owned subsidiary of HL.

We still do not have the full details of this transaction, however, per the press release, Chi’s owners will receive 775,000 HL ordinary shares, 3,000,000 newly issued HL Class I warrants with an exercise price of $10.33 and 4,000,000 newly issued HL Class II warrants with an exercise price of $15.00  Both warrant classes will have a three year life.

HL’s Founders have also agreed to forfeit 200,000 ordinary shares of HL in exchange for the issuance of 600,000 Class I Warrants.  Additionally, HL’s Founders will forfeit an aggregate of up to 579,364 ordinary shares of HL, with the number of shares to be forfeited to be determined based on the amount of cash remaining in HL’s trust account at the close.

Interestingly, Chi’s Founder and CEO, Ajay Khandelwal, who is also a director of HL, will become HL’s CEO.  While this is technically not problematic, there’s something about it that feels a little too “close”. However, if you consider Gores II and Gores III, which sourced their acquisitions from the family private equity firm (Platinum Equity), it’s similar.  However, HL’s situation isn’t just sourcing from a relative, but from a direct SPAC team member.

Additionally, per the press release, HL intends to amend the HL Warrant Agreement whereby they will convert each existing HL public and private warrant into the right to receive 0.1 of an HL ordinary share at the time of the close.

Lastly, the transaction is expected to close late first quarter/early second quarter of 2020 and there is a minimum cash closing condition of $39 million, after payment of expenses and redemptions from the HL trust account and including any proceeds of any new equity financings.  HL currently has approximately $56.8 million in trust, so $39 million is a little more than two-thirds.  However, “any new equity financings” in the above phrasing sounds like its on the table in order to shore up that minimum cash closing condition.

In summary, this is an “energy adjacent” sector acquisition.  Energy, in particular for SPACs, has been a challenging combination sector in 2019 and while HL’s target is in the logistics space, it is notably serving the Oil Field Services and Transportation sectors.  Both of which have been under significant pressure the past few years. Plus, Chi Energie appears to only be in the development stage, rather than a revenue generating company (although, we still need more details to fully understand Chi). A conference call has not been scheduled as of yet, nor a presentation filed.  However, maybe we get both of those items tomorrow to fully flesh out this combination.  Keep in mind that HL has an extension vote coming up on January 2nd, 2020, so the deal details are critical to understanding the value of this transaction ahead of that vote, which should determine how much cash is left for HL to use.

 

Recent Posts
by Nicholas Alan Clayton on 2024-03-28 at 1:35pm

News and Rumors PR: Bannix (NASDAQ:BNIX) has provided more information on the combination with VisionWave that it announced yesterday, specifying that the imaging technology that VisionWave will acquire from GBT Technologies will primarily seek out applications in military combat scenarios and geological surveys. PR: Grove Collaborative (NYSE:GROV), which combined with Virgin Group II in June...

by Nicholas Alan Clayton on 2024-03-28 at 7:47am

At the SPAC of Dawn Fed Chair Jerome Powell has given new hints that the administration would be showing greater levels of comfort with inflation if a cut could help improve unemployment numbers. Those numbers could get an update today at 8:30 am ET to bring new jobless claims as well as final prices for...

by Nicholas Alan Clayton on 2024-03-27 at 1:31pm

News and Rumors CNBC: Former WeWork (OTC Pink:WEWKQ) founder Adam Neumann has offered to buy back control of the company for $500 million but has yet to secure the necessary financing. WeWork went public with BowX in October 2021. PR: Satellite telecom firm Spire Global (NYSE:SPIR) has signed an agreement to build and launch two...

by Nicholas Alan Clayton on 2024-03-27 at 11:38am

Bannix (NASDAQ:BNIX) has entered into a definitive agreement to combine with VisionWave Technologies for $30 million. The combined company is expected to trade on the Nasdaq once the deal is completed with an initial outside date of September 14. Transaction Overview Bannix has about $17 million in its trust after seeing 77.4% of its shares...

by Nicholas Alan Clayton on 2024-03-27 at 7:33am

At the SPAC of Dawn Much of the attention yesterday was on tracking the swings of the newly-completed Trump Media (NASDAQ:DJT) deal with the FT going as far to suggest it may “make SPACs great again.” Not all of the day’s data points were on the positive side of the ledger, however. IB Acquisition Corp....

logo

Copyright © 2023 SPACInsider, Inc. All Rights Reserved