NEW YORK (Reuters) – Renaissance Acquisition Corp (RAK.A), a special purpose acquisition company, said on Monday it would liquidate after running out of time before it could purchase another company, as required by its charter.
A special purpose acquisition company, or SPAC, is a shell organization that uses money raised in an initial public offering to buy another business. That business then becomes publicly traded through the SPAC once shareholders approve the deal.
A SPAC has two years after its IPO to complete an acquisition, or else investors get their money back. Renaissance, which raised $93.6 million on Jan. 29, 2007, said it will not complete a deal by Thursday’s deadline.
Renaissance said in a statement it would begin returning money to investors soon after Thursday, and expects to distribute $5.93 per share.
There are currently 56 SPACs that have raised a total of $11.2 billion but have yet to make an acquisition, according to Thomson Reuters data. Of those, 46 were filed in 2007 and face liquidation in 2009 if they cannot complete an acquisition this year. (Reporting by Phil Wahba; Editing by Tim Dobbyn)