Exclusive: Quanergy is approaching a China-backed SPAC agreement to go public

By Echo Wang

(Reuters) – Quanergy Systems Inc, a provider of self-driving car technology, is set to close a deal to go public through a merger with Chinese blank check acquisition company CITIC Capital Acquisition Corp, said Monday people familiar with the matter.

Quanergy is said to be the latest company to develop LiDAR technology – which uses laser beams to help generate a three-dimensional map of the road – to turn to a Special Purpose Acquisition Company (SPAC) to go public.

Others who have done so include Luminar Technologies Inc and AEye, backed by Peter Thiel.

The PSPC deal would value Quanergy at $ 1.1 billion and could be announced as early as this week, the sources said.

The sources requested anonymity because the negotiations are confidential. Quanergy and CITIC did not immediately respond to requests for comment.

CCAC raised approximately $ 240 million in an IPO on the New York Stock Exchange in February 2020. It is sponsored by CITIC Capital Holdings Limited, which is backed by CITIC Group, the largest investment conglomerate in China.

The company was preparing to file an application for approval of the deal with the Committee on Foreign Investments in the United States (CFIUS), a national security panel that examines foreign investments, according to one of the sources.

Quanergy expects CFIUS to give the green light to the deal as CITIC would keep its stake in the company below 10%, and Quanergy was not committed to recording drivers’ personal data, added source.

No Quanergy shareholder would sell any shares as part of the transaction. The net cash proceeds held by the combined company were estimated to be around $ 278 million, the sources said. They would be used to fund its operational growth and for general corporate purposes.

Quanergy shareholders would own around 72% of the combined company, while PSPC shareholders would own around 20%, with most of the rest going to outside investors.

Founded in 2012, Quanergy is headquartered in Sunnyvale, California. The company said it is the only major LiDAR supplier to use Optical Phased Array technology, which reduces moving parts and is therefore better suited to the demands of the automotive industry.

(Reporting by Echo Wang in Asheville, NC; editing by Stephen Coates)

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