The Zhitong Finance App learned that Jeplan Inc., a small Japanese plastic recycling company, is preparing to go public in the US this month through a merger with SPAC, although many companies that are expected to do IPOs are delaying or canceling such plans.

Jeplan Inc. plans to merge with special purpose acquisition company AP Acquisition Corp. (APCA.US) and will be listed on the New York Stock Exchange within the next few weeks. If the deal goes smoothly, assuming AP Acquisition's investors have no additional equity financing or redemptions, then Jeplan's valuation will be around $300 million, and the combined entity is estimated at $429 million.

As the redemption rate climbed to well above 90%, public listings through SPAC mergers are being scrutinized more strictly by investors. But Jeplan thought the risk was worth it. The company said listing on the NYSE would enable it to access capital from a wider range of investors, enhance its brand, and attract the additional talent needed to drive further growth.

“This has given us time,” Jeplan CEO Takao Masaki Takao said in an interview.

Jeplan, founded in 2007, has developed chemical recycling technology that theoretically allows PET bottles to be reused millions of times. According to the company, the company's technology breaks down waste plastic into a resin close to the original, with only one-millionth of a metal residue. According to data from market research firm Imarc Group, Japan's share of the global chemical recycling market is only 3% to 5%.

Jeplan has now signed a contract with the Japanese beverage company Asahi Group Holdings Co., Ltd., which has begun to use Jeplan's technology to recycle PET bottles from approximately 30,000 vending machines in Tokyo and plans to promote it in other parts of Japan. Proceeds from the listing will help drive the company's R&D and expand its ability to recycle more products.

However, according to analyzed SPAC Research data, in the past year, an average of about 94% of stocks in US SPAC mergers were exchanged for cash. According to data from SPAC Research, more than 300 SPACs have been liquidated since November 2022, and those that are still in operation have been withdrawn by the vast majority of investors.

“Any company merging with SPAC must know that the trust funds left there during the deal are really low,” said Jay Ritter, a professor at the University of Florida who tracks the issuance of new shares. “Unless this company is lucky — which is possible — a cash trust fund probably won't provide significant amounts of cash.”

Japanese air cushion bike manufacturer Aerwins Technology Inc. went public on the NASDAQ through a merger with SPAC last year, but its Japanese subsidiary A.L.I. Technologies Inc. filed for bankruptcy only 10 months later. Even without considering SPAC factors, post-listing success is elusive for Japanese companies entering overseas. The stock prices of the six Japanese companies listed on the NASDAQ in the past year were lower than their initial public offering (IPO) prices.

Now, with Japan's benchmark Nikkei 225 breaking through its 1989 all-time high, interest in overseas listings is likely to wane in the next few months.

Sponsored by Japanese private equity firm Advantage Partners, AP Acquisition was founded two years ago to merge with a company engaged in decarbonization or renewable energy. So far, the blank check company has had to delay the merger deadline twice.

AP Acquisition CEO Keiichi Suzuki said, “We want to raise capital quickly and go public quickly.” “In this way, the company can expand its business and win license agreements in many different places ahead of other companies.”