US firm enters reverse merger with Solar Semiconductor

Hyderabad: The US- based Trans-India Acquisition Corporation has entered into an agreement to acquire about 80 per cent of the privately held Solar Semiconductor Ltd.

Describing the development as a ‘reverse merger’, Mr Hari Surapaneni, President and Chief Executive Officer , Solar Semiconductor, said the value of the transaction would be around $375 million.

According to the agreement, the shareholders of Solar Semiconductor would receive in exchange for their stock, shares of Trans-India common stock valued at $8 a share at present.

Mr Hari said “It is not an equity sell out, but a share swap and merger and also not a cash deal. It would see the emergence of a new entity post completion of the regulatory requirements in the US”.

The new entity would be called Solar Semiconductor Corporation. The management would remain the same, except for one member of Trans-India Acquisition Corporation joining the Board, he explained in response to queries from newspersons.

Solar Semiconductor, which is incorporated in Cayman Islands, has subsidiaries in the US and India. It has manufacturing plants in Hyderabad. Its current annual capacity is 75 MW of solar photovoltaic modules.

The consolidated revenue of Solar Semiconductor is approximately $15.2 million for fiscal ended March 31, 2008 and approximately $27.3 million and $27.2 million for the subsequent two quarters. It expects to end the current fiscal at approximately $140 million, Mr Hari said.

The company has a backlog of $2 billion in revenue through 2011, with contracts signed with nine major European and American customers. To facilitate this, it is ramping up manufacturing and plans to reach 200 MW capacity by end of the fiscal.

The reason to go ahead with the new agreement was the access it would give to fresh capital and bandwidth for Solar Semiconductor to grow in the solar energy sector, said Mr Hari.

Trans-India Acquisition Corporation is a special purpose acquisition corporation formed to effect acquisition, through a merger, capital stock exchange, asset acquisition of one or more target businesses with operations primarily in India. It raised around $92 million through an IPO in February 2007.