The deal between blank cheque firm Trans-India Acquisition Corp and Solar Semiconductor Ltd has fallen off. Backed by former ICICI Bank chairman N Vaghul, Trans-India is a special purpose acquisition company (SPAC) listed in the American Stock Exchange (AMEX).
Trans-India was not able to get permission from its investors on time till February 14, resulting in both the companies agreeing to call off the deal. The deal was announced in October 2008, where Trans-India agreed to acquire at least an 80% stake in Solar Semiconductor for $375 million.
Solar Semiconductor Ltd is a Hyderabad-based photovoltaic (PV) modules maker. It has manufacturing plants located in Hyderabad with capacity for 75 MW of module production. The company is also developing another facility, with capacity for both PV module and solar cell manufacturing, in SEZ in Hyderabad. The firm reported revenues of $15.2 million in FY08, and the consolidated revenues for first two quarters of FY09 was $54.5 million. It is now looking for a similar deal with a private equity player or a blank cheque firm.
Trans-India is also now dissolving and liquidating itself as it was not able to any deals till the deadline of 14 February, 2009, the company said in an SEC filing. Trans-India listed in 2007, and was given a fixed time to consummate deals. Now it will have to return money to the shareholders. It was looking for acquisitions in the lifesciences space. Trans-India is chaired by N Vaghul and led by Bobba Venkatadri, Nalluru Murthy and Sarath Naru (managing director of VenturEast).
SPACs In India
A Special-purpose acquisition company (SPAC) is a pooled investment vehicle that allows public stock market investors to invest in private equity type transactions. But they are usually focused on one transaction and are more liquid.
There are several SPACs operational in India for past few years. In 2007, blank check firm India Hospitality Corp, which is listed on AIM, announced the acquisition of Mumbai-based Mars Restaurants and its sister concern SkyGourmet Catering for approximately $110 million.
Last year Phoenix India Acquisition Corp acquired a 65% stake in Citius Power Limited.
Another AMEX listed SPAC is Millennium India Acquisition Company, which acquired 14.9% stake in Delhi-based brokerage firm SMC Global for about $40 million.
There are also others like East India Company Acquisition Corp (backed by IT & ITES industry veterans Dipak Nandi, Kary Shankar and Saurabh Srivastava) and Global Services Partners Acquisition (floated by Avinash Vashista, founder of Tholons and former CEO of neoIT, and backed by Saurabh Srivastava). Earlier this year HCL's Shiv Nadar had indicated plans of raising a special purpose acquisition company (SPAC) at NYSE Euronext.