Covid-19 claims its first SPAC.
HL Acquisitions Corp. (HCCH), announced this morning it has mutually terminated its Sale and Purchase Agreement with Chi Energie (Singapore) Pte. Ltd. (“Chi Energie”). The reason cited being, “the current extraordinary market conditions surrounding the industry.“
Chi Energie, was developing a modular LNG business to supply the remote power, oil field service and transportation sectors in Oman, but due to the Russian-Saudi oil price war, as well as the current Covid-19 crisis, clearly the current conditions no longer made sense for this deal. In fact, it would be difficult to come up with a more challenging environment.
However, HL Acquisitions Corp. did extend their completion date just one month ago, so they still have until July 2, 2020 to announce and close a new transaction. That’s three months away, so most likely, they will need to extend again, but they do have time to find and announce something new. Whether that will be in the energy space again, remains to be seen, but keep in mind that HL is not obligated to look in that sector. Energy was their originally stated focus, but they can still look for companies in other industries.
Let’s see what they bring back for the next go-around.