On Friday, Greencity Acquisition Corporation (GRCYU) filed for their $40 million IPO. They will be focused on the Asian middle-market, with emphasis on finding one or more companies between $150 to $250 million of total enterprise value. Cynthia Management Corporation, the sponsor, is a British Virgin Islands company, majority owned by Greencity management.
With a focus as broad as the Asia middle-market in mind, the backgrounds of the management team also share a similar expansive breadth of experience. Common themes between the executives do emerge though, particularly in the ecommerce, automotive, and logistics industry segments. The Greencity team will be led by Ming Zhang, as CEO, Jianmin Yu, as CFO, and Jinlong Liu, as Chairman. Mr. Zhang has co-managed several growth equity funds in China, most recently with CCIN Capital Management Corp., which focuses on public private partnerships, non-performing assets and pre-IPO investments in China, and Manzi Holding Corp., which focuses on venture capital investments in China. He also has founded and operated three start-up ecommerce companies, including Seven Day Ecommerce Co., New Dream Technology Co., and Weipin Industries Co.
Jianmin Yu, the CFO, also comes to Greencity most recently from CCIN and Manzi Holding Corp. Mr. Yu is also on the board of directors for Shanghai Midai Investment Group., a company that focuses on auto finance, real estate investments, and investments relating to logistics, tourism and individual transportation. He has served as an independent consultant in the finance and e-commerce industries as well as President of Cargo Services (China), a logistics company in the Chinese market, and CMA Logistics (China), a container ship owner.
Jinlong Liu, Chairman and majority owner of Cynthia Management Corporation, Greencity’s sponsor, currently serves as chairman of Shanghai Midai Investment Group, having previously been CEO of Shanghai Midai Automobile Group, a subsidiary focused on auto sales, rental, finance and repairs, and gasoline trading. Prior to that, Mr. Liu was a manager of Ye Chiu Resources, a firm specializing in manufacturing and exportation of aluminum materials in China.
Looking at this SPAC’s structure, we see a very small offering from a first time SPAC team with investor-friendly terms to get the deal sold. More specifically, it is a $40 million, 1 warrant for 1/2 share, 12 month life SPAC, with 6.5% of total capital at-risk from the sponsor, monthly extension contributions after 12 months to 21 months, and $10.15 per unit in trust to start. The monthly extension contributions are $0.033 per share, meaning that at month 21, additional contributions will total $0.30 per share. These terms look very similar to previous Asia focused SPACs such as AGBA Acquisition Limited, Longevity Acquisition Corporation, and Tottenham Acquisition I Limited, however, Greencity’s unit does not include a Right.
Green City, in Pudong, Shanghai, is a high-end western inspired community blending low density upscale housing with nature. These SPAC terms are similarly high-end and will undoubtedly attract some investors, regardless of the future acquisition target. Look for Greencity to price the end June.
Summary of the terms below: