NEW YORK (Reuters) – Blank-check company Orbit Acquisition Corp withdrew its filing for an initial public offering on Friday, citing “market conditions” in a letter to U.S. regulators.
Orbit Acquisition had filed an IPO prospectus with the U.S. Securities and Exchange Commission in February 2008 and planned to raise $250 million to purchase a company in the energy and power sectors.
Blank-check companies, more formally known as special purpose acquisition company, or SPACs, are shell organizations that use money raised in an IPO to buy another business. That business then becomes publicly traded through the SPAC once shareholders approve the deal.
They are called “blank-check” companies because they raise money on the basis of the reputation of their managers before investors know what company the SPAC is targeting.
Orbit Acquisition’s Chief Executive Garry Hubbard was senior vice president of development, construction and acquisitions at Panda Energy International Inc earlier this decade, while its chairman, Gabriel Nechamkin heads trading at Satellite Asset Management LP and previously ran one of the arbitrage departments at Soros Fund Management.
SPAC popularity peaked in 2007 and they have fallen out of favor with investors — there have no new IPO filings by SPACs this year, according to Thomson Reuters data. (Reporting by Phil Wahba; Editing by Tim Dobbyn)