Phoenix India Acquistion Corporation will acquire the identity of a “corporate”, and will lose its status as a special purpose acquisition company (SPAC) or a blank check firm. The SPAC, formed in 2005 by Raju Panjwani and Rakesh Akella, had failed to get the shareholder approval for the acquisition of 65 per cent stake in the wind energy company Citius Power Ltd by April 5 deadline. According to the blank check norms, the SPAC has to be disbanded and the funds (the trust has $58 million) have to be distributed to its shareholders.
In order to avoid the dissolution of Phoenix, the management managed to get the shareholder approval to remove the blank check company restrictions from the company’s charter. This enables the company to continue its corporate existence, past liquidation in a vote held on April 8. “This is the best way to preserve the company and create the most value for our stockholders”, the company said in a statement. The trust distributions were made according to the company on April 22. Phoenix had about $58 million in trust, according to its latest annual filing.
Phoenix India Acquisition Corp. acquired a 65-per cent stake in Citius Power through a subscription to Citius’s convertible preferred shares on an as converted, fully diluted basis. Now the acquisition had failed to get shareholder approval, Phoenix will effect a shell reverse merger by acquiring a 65 per cent stake in Indian wind energy company after raising the capital needed for the deal through a $45 million private placement.
New York based Phoenix India Acquisition Corp. was formed in 2005 with an intention to acquire an operating business within the IT/ITES, KPO, BPO sectors operating in India. Probably acquiring a wind energy company was not there among its objectives.

Posted on 05/7/08, 11:58 AM
in: Private Equity
RSS 2.0, You can skip to the end and Respond. Pinging closed.