Four more SPAC listings are expected to follow in the footsteps of Hibiscus Petroleum Bhd, which was the first SPAC to list on Bursa Malaysia in July 2011.

One of them is Sona Petroleum Bhd.

Based on its draft prospectus released on the Securities Commission website recently, Sona's initial public offering (IPO) could potentially be the largest by a SPAC in Malaysia with a fund-raising size of up to RM550 million.

The company's focus is on the exploration and production (EandP) segment of the lucrative oil and gas sector with target markets and regions of interest in Southeast Asia, the Middle East and Africa.

A SPAC is a company that has no operations or income-generating business at the point of IPO, and has yet to complete a qualifying acquisition (QA) with the proceeds of such offering.

Several key aspects of a SPAC are the management's credibility, investor protection, refund flexibility and alignment of interest between investors and management.

A SPAC must have a credible management team who can identify attractive targets and make value-creating acquisitions that will meet the SPAC's strategy and enhance shareholders' value.

The management team must have the track record, qualifications and experience that are relevant to specific industries where acquisitions are intended to be made and achieve the SPAC's business strategy as laid out in the prospectus and to competently perform their individual roles.

In Sona's case, its management team will be led by oil and gas veteran Datuk Seri Hadian Hashim, who started his career with Sarawak Shell and later ventured into oil and gas industry-related businesses from 1995 onwards.

He brings with him more than 30 years of experience as an engineer and entrepreneur in the industry.

The board of directors, the majority of whom will be running the EandP business, has a combined experience of more than 390 years in the industry.

According to the draft prospectus, Sona Petroleum will be offering up to 1.1 billion shares at 50 sen per share with up to 1.1 billion free detachable warrants on the basis of one warrant to every share.

This will be the first SPAC with the International Trade and Industry Ministry's Bumiputera offering in the institutional offering tranche.

Just like any other SPAC, Sona Petroleum is dependent on the management's capability to successfully acquire the right kind of assets within the permitted time frame of three years.

Once listed, 90 per cent of the proceeds will be placed in a trust or escrow account, which is interest-bearing.

Any SPAC that fails to complete a QA within the permitted time frame will have to be liquidated and investors will receive the money held in the trust account.