RMG Acquisition Corp. III Announces Liquidation
- None.
- The Company's dissolution and liquidation indicate a failure to meet business combination targets, resulting in shareholder liquidation. The expiration of warrants without redemption rights may lead to financial losses for warrant holders.
In light of RMG Acquisition Corp. III's announcement to dissolve and liquidate, the immediate financial implication is the redemption of Class A ordinary shares at an approximate value of $10.00 per share. This action is a clear indicator of the company's inability to achieve its initial business goals within the stipulated timeframe. The redemption process, while seemingly straightforward for record holders and beneficial owners, will result in the cancellation of public shares, effectively removing the company from public trade.
From an investor's perspective, the waiving of redemption rights by the company's sponsor for certain shares suggests a loss that they are willing to absorb, which could be indicative of the sponsor's longer-term strategic considerations or responsibility to other stakeholders. The lack of redemption rights for warrant holders, rendering these warrants worthless, is a significant loss for warrant investors and reflects the risks inherent in such investment vehicles. This development is a reminder of the speculative nature of investing in special purpose acquisition companies (SPACs) and the associated risks.
The expected delisting from Nasdaq and the termination of securities registration are procedural steps following the dissolution, which will finalize the company's exit from the public market. This will likely affect the liquidity and marketability of any remaining securities associated with the company.
The announcement by RMG Acquisition Corp. III to dissolve and liquidate raises several legal considerations. The company's obligations under Cayman Islands law to provide for the claims of creditors before distributing the proceeds from the trust account to shareholders is a critical step in the liquidation process. This obligation ensures that the company settles its debts in compliance with legal standards, which is a safeguard for creditors' rights.
The procedural aspects, such as the filing of a Form 25 to delist the company's securities and a Form 15 to terminate the registration of its securities, are in accordance with the requirements of the Securities Exchange Act of 1934. These filings will serve as the formal documentation of the company's cessation of public trading status and are necessary steps to comply with regulatory standards.
For shareholders and warrant holders, the legal processes outlined in the announcement provide a clear framework for the next steps. However, for warrant holders, the outcome is particularly unfavorable, as the expiration of warrants without any redemption or liquidating distributions underscores the risks associated with such securities.
As of the close of business on April 22, 2024, the Public Shares will be deemed cancelled and will represent only the right to receive the redemption amount. Record holders will receive their pro rata portion of the proceeds of the trust account, subject to the Company’s obligations under
The Company’s sponsor has agreed to waive its redemption rights with respect to (i) its outstanding Class B ordinary shares issued prior to the Company’s initial public offering and (ii) its 3,500,000 outstanding Class A ordinary shares that were converted from Class B ordinary shares into Class A ordinary shares on December 26, 2023. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless.
The Company expects that Nasdaq will file a Form 25 with the United States Securities and Exchange Commission (the “Commission”) to delist the Company’s securities. The Company thereafter expects to file a Form 15 with the Commission to terminate the registration of its securities under the Securities Exchange Act of 1934, as amended.
FORWARD-LOOKING STATEMENTS
This press release contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on the Company’s current expectations and are subject to numerous conditions, risks and uncertainties, which could cause actual results to differ materially from those reflected in the statements, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on April 18, 2023, and the Company’s quarterly reports on Form 10-Q filed with the SEC, each available on the SEC’s website, www.sec.gov. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from the projections in the forward-looking statements. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240408379227/en/
INVESTOR:
Philip Kassin
President & Chief Operating Officer
pkassin@rmginvestments.com
+1 (786) 359-4103
Source: RMG Acquisition Corp. III
FAQ
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