KLR Energy Acquisition Corp. has debuted on the stock market in a so-called blank-check IPO, raising about $80 million in proceeds. KLR Energy is a blank check company, also commonly referred to as a special purpose acquisition company, or SPAC.
Such companies have no operations, but are formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. The proceeds from the IPO are intended to be used for merging or acquiring a company.
The SPAC is required to make acquisitions from the proceeds of their IPO within a period of two years. Otherwise, it will be forced to dissolve and return the assets held in the trust to the public stockholders.
On March 10, KLR Energy said it priced its initial public offering of 8 million units at a price of $10.00 per unit. The company intends to make acquisition in the U.S. oil and natural gas sector.
EarlyBirdCapital is acting as sole book-running manager for the offering. KLR Energy has granted the underwriters a 45-day option to purchase up to an additional 1.20 million units at the initial public offering price to cover over-allotments.
The units listed on the Nasdaq Capital Market and are trading under the ticker symbol "KLREU" from March 11, 2016. KLR Energy is being sponsored by KLR Energy Sponsor LLC, an affiliate of KLR Holdings LLC.
The closing of the company's IPO is expected on or about March 16, 2016. Each unit consists of one share of the company's Class A common stock and one warrant, enabling the holder thereof to purchase one share of the Class A common stock at a price of $11.50 per share.
Once the securities comprising the units begin separate trading, the Class A common stock and warrants are expected to be listed on Nasdaq under the symbols "KLRE" and "KLREW," respectively.
The biggest IPO this year was also by a SPAC. Silver Run Acquisition Corp. said on February 29 that it completed its $500 million initial public offering.
The energy-focused SPAC's units are trading on the Nasdaq Capital Market under the ticker symbol "SRAQU."
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