Flame Acquisition Corp. (FLME) Previews Encouraging Redemptions for Sable Offshore Deal
by Nicholas Alan Clayton on 2024-02-09 at 10:48am

Flame (NYSE:FLME) tipped in an 8-K this morning that only 150,823 shares were redeemed by the deadline ahead of its February 12 vote to complete its combination with Sable Offshore, demonstrating that fundamental investors are still sticking to some SPAC deals.

Assuming this figure holds, Flame will have completed the deal with just 79.2% redemptions, the lowest rate since Vahanna Tech closed its combination with Roadzen in September 2023 with 78.3%.

But, Vahanna Tech also went into its closing with a forward-purchase agreement covering up to 5,000,000 shares, while Flame’s came upon this total organically without any such structures or a backstop.

Instead, Flame managed to arrange a $520.4 million PIPE at $10 per share for the combination, which was itself makes for the third largest PIPE for any SPAC deal announced since January 1, 2022, behind only Social Capital Suvretta III‘s combination with ProKidney (NASDAQ:PROK) and Rice II‘s tie-up with Net Power (NYSE:NPWR).

The end results give Flame the most final trust proceeds going into a deal since Bridgetown‘s October closing with MoneyHero (NASDAQ:MNY), but Bridgetown’s results were similarly boosted by a $50 million non-redemption agreement arranged in the terms of its IPO.

What’s more, Flame might have finished with even more impressive final redemptions had timing been on its side.

It initially struck its $883 million combination with Sable Offshore in November 2022. Sable Offshore was set up to purchase ExxonMobile’s (NYSE:XOM) Santa Ynez Unit offshore oil field and its associated onshore facilities off the coast of California.

At the time, these facilities were effectively shut down and barred from producing due to a leak from the underwater pipeline connecting them in 2015.

But, in December, the California State Lands Commission approved a five-year extension to the permit on the stalled pipeline to January 31, 2029 and exempted it from other state actions blocking any new or existing offshore leases, effectively give it the green light once again.

Flame initially appended a $71.5 million PIPE to the combination at announcement, and added the nearly $450 million in additional commitments after this crucial vote. Before the vote, however, Flame had already held two extension votes, which is where it experienced the vast majority of its redemptions.

Plenty more investors may have preferred to stick with Flame through to completion had these votes come after the offshore project’s approval to recommence operations were more of a sure thing. That has been further demonstrated by Flame’s rise in morning trading to about $11, well above its redemption price of $10.41.

Recent Posts
by Nicholas Alan Clayton on 2024-07-12 at 8:17am

At the SPAC of Dawn With all eyes on the fireworks both literal and figurative in Western politics this month, July has hosted a relative drought of new business combinations with just one so far announced. But, there are flashes on the horizon as three SPACs signed letters of intent to combine with targets in...

by Nicholas Alan Clayton on 2024-07-11 at 4:59pm

Launch One Acquisition Corp. announced the pricing of its $200 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “LPAAU”, Friday, July 12, 2024. The new SPAC aims to combine with an established company of scale in healthcare and healthcare-related industries and, in particular, life sciences, globally. Launch...

by Nicholas Alan Clayton on 2024-07-11 at 8:24am

At the SPAC of Dawn As the market awaits the reading for the US’ CPI numbers for June at 8:30 am ET, SPAC teams are increasingly looking outside of the US for filing their initial corporate documents. So far, none of the 34 SPACs that have filed for IPOs in 2024 have been domiciled in...

by Nicholas Alan Clayton on 2024-07-10 at 8:11am

At the SPAC of Dawn Wednesday is set to be potentially the busiest day of the week for SPACs with three extension votes and a completion vote for investors to get through. The day also holds the possibility of being the month’s first debut of multiple SPACs at once as SIM I (NASDAQ:SIMAU) priced overnight...

by Nicholas Alan Clayton on 2024-07-09 at 9:59pm

SIM Acquisition Corp. I announced the pricing of its $200 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “SIMAU”, Wednesday, July 10, 2024. The new SPAC aims to combine with a healthcare company with an attractive established position. SIM I’s sponsor team is to be led by...

logo

Copyright © 2023 SPACInsider, Inc. All Rights Reserved