Chenghe Acquisition I Co. (NASDAQ:LATG), a special purpose acquisition company, has entered into a Prepaid Share Forward Agreement with investment entities Harraden Circle Investors, LP and Harraden Circle Special Opportunities, LP.
The agreement, dated December 27, 2024, outlines the terms for a transaction involving the purchase and future sale of Chenghe's Class A ordinary shares.
Under the terms of the agreement, the investment entities, collectively referred to as the Seller, may purchase up to 3,000,000 shares from third parties or reverse redeemed shares before Chenghe's business combination with Femco Steel Technology Co., Ltd., a Taiwanese company. Additionally, the Seller will commit to purchasing 100,000 shares that they agree not to sell below a set price within 30 days post-combination.
Chenghe will pay the Seller a Prepayment Amount based on the number of shares and the redemption price directly from its trust account. The Seller can terminate the transaction in part or in full at any time after the business combination, and Chenghe will be entitled to a payment based on the then-current Reset Price and the number of shares terminated.
The Reset Price, initially equal to the Redemption Price, may be adjusted downward at Chenghe's discretion. On the maturity date, 12 months after the business combination's closing, the Seller must return the remaining shares to Chenghe and is entitled to keep an amount based on the Redemption Price multiplied by the number of shares.
The Redemption Price per share as of December 26, 2024, was approximately $11.79. The specifics of the agreement are detailed in the Exhibit 10.1 of the SEC filing made by Chenghe Acquisition I Co. on January 2, 2025. This strategic move comes as Chenghe prepares to finalize its business combination with Femco Steel Technology.
The news above is based on an SEC filing.
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