Hyderabad-based Solar Semiconductor, which manufactures photo voltaic (PV) modules and solar cells, has entered into a reverse merger agreement with US-based Trans-India Acquisition Corporation (TIAC).
TIAC, which is listed on the American Stock Exchange, is a special purpose vehicle floated to raise money through mutual funds, hedging and institutional funds and invest the same in acquisitions.
Under the agreement, TIAC will acquire no less than 80 per cent in Solar Semiconductor and its subsidiaries in India and the US. It will pump in $92 million (about Rs 450 crore) for its expansion activities. Solar Semiconductor, on the other hand, will have access to capital markets for raising funds, bypassing the process of going public.
Speaking at a press conference here, Solar Semiconductor CEO and President Hari R Surapaneni said the shareholders would get TIAC common stock valued at $8 a share in exchange for their stock share. The purchase price will increase or decrease, based on performance. The initial closing of at least 80 per cent of the outstanding capital stock of Solar Semiconductor will be on February 14.
The company resulting due to the merger will be named Solar Semiconductor Corporation and TIAC will cease to exist after the closure of the agreement. The existing Solar Semiconductor management will continue in the new company. TIAC will file with the Securities and Exchange Commission a proxy statement for the proposed transaction.
Solar Semiconductor, at present, has a 75-Mw manufacturing facility at Hyderabad. It is also setting up a new campus on 50 acre at the Fab City here. By the first quarter of 2009, the company would an additional 120 Mw PV module capacity and PV cell capacity of 30 Mw each in the second and fourth quarter of 2009.
The company registered consolidated revenue of about $15.2 million (about Rs 74.48 crore) for the year ended March 31, 2008. Revenues in the second quarter ended September 30 stood at $27 million (Rs 132.3 crore). “We expect the revenues to touch $140 million (Rs 686 crore) by March 2009 on the back of current orders,” he said.
