May 2 (Reuters) – Chinese electric vehicle company CH-AUTO Technology Corp Ltd said on Monday it had agreed to release a blank check to a U.S. company in a deal valued at nearly $1. $7 billion including debt.
The deal with Mountain Crest Acquisition Corp IV (MCAF.O) includes net worth of $1.25 billion and net debt of $460 million, the companies said.
A Special Purpose Acquisition Company (SPAC) is a publicly traded company with no business operations but with a pool of capital that it uses to merge with a private company that it makes public.
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PSPC Mountain Crest Acquisition Corp (MCAF.O)raised $50 million in an initial public offering in June last year.
“The past two years have been quite difficult for us. We had to scale down our operations by slowing down vehicle and auto parts manufacturing activities,” said Qun Lu, Founder and CEO of CH-AUTO.
“By entering into this definitive merger agreement with Mountain Crest, we expect to see a positive and rebounding impact.”
The combined company plans to operate as CH Auto Inc and list on the Nasdaq stock exchange.
The transaction is expected to close in the fourth quarter of 2022 with Lu leading the combined company.
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Reporting by Mehnaz Yasmin in Bangalore; Editing by Shinjini Ganguli
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