Chinese electric vehicle company CH-AUTO Technology Corp. Ltd. said on Monday it had agreed to go public with a US blank-check firm in a deal valued at nearly $1.7 billion, including debt, according to Reuters.

The deal with Mountain Crest Acquisition Corp. IV comprises an equity value of $1.25 billion and a net debt of $460 million, the companies said.

A special purpose acquisition company is a listed firm with no business operations but a pool of capital that it uses to merge with a private company that it takes public.

SPAC Mountain Crest Acquisition Corp. raised $50 million in an initial public offering in June last year.

“The past two years have been quite challenging for us. We had to reduce our operations by slowing down the businesses of manufacturing of vehicles and automotive parts,” said Qun Lu, founder and chief executive officer 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 under the name CH Auto Inc. and list on the Nasdaq stock exchange.

The transaction is expected to close in the fourth quarter of 2022 with Lu at the helm of the combined company.

(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Shinjini Ganguli)