The mainboard-listed company yesterday scrapped its twice-delayed $2.7 billion reverse takeover deal with Perfect Field Investment, after the Chinese maker of solar energy panels failed to meet production-capacity targets.

The deal, announced in May, involved Rowsley, an investment firm with a market value then of $87 million, acquiring Perfect Field by issuing $2.7 billion worth of new shares.

That deal would have resulted in Perfect Field's owner - the Totalpro Group, majority owned by its founder, Chinese scientist and inventor Ma Xin - owning 92 per cent of Rowsley.

Former UOB Kay Hian 'remisier king' Peter Lim, Rowsley's biggest shareholder, was to pump in $150 million of his own money to finance the Chinese firm's expansion.

The attraction: a new technology for building silicon panels for solar energy at a fraction of the cost of rival products on the market. Perfect Field's technology would be used in the main stadium for the 2008 Olympics in Beijing, Rowsley had said earlier this year.

But there were misgivings from the start, mainly over how the Chinese firm could guarantee a net profit of $300 million by end-June next year when its factory in China's Jilin province was only expected to be completed at the end of this year.

Yesterday, Rowsley chief executive officer Koh Kim Huat said the deal was axed because certain conditions were not met, the most crucial being the Jilin factory achieving an aggregate production capacity of 100MW by Oct 31.

Rowsley shares jumped 15 per cent to 23 cents, before being suspended last Friday pending yesterday's announcement, which came as the company returned to the black.

It said yesterday that it made a net gain of $5.8 million for the first half ended Sept 30, against a loss of $1.5 million last year, largely from the sale of its interest in ceramics maker Eagle Brand Holdings.

Elaborating on the scrapped deal over the telephone, Mr Koh said Perfect Field was 'unable to give us a firm timeline' as to production capacity and 'had underestimated the cash flow required'. Perfect Field, in its own statement yesterday, said it had encountered funding needs which were significantly higher than anticipated, so it had to raise additional funds.

But the China story for Rowsley may have a sequel.

Perfect Fields said yesterday it will seek a listing on the Singapore Exchange's new, yet-to-be-launched second board, while Rowsley said it will be given an option to buy 5 per cent of the company before the listing at a 25 per cent discount to the offer price.

'By the time of the initial public offering, we will have greater clarity regarding its production capacity, its growth potential and the valuation put on its business,' Mr Koh said. He added that with the deal out of the way, Rowlsey can now evaluate other investment opportunities.

No timeframe was given for Perfect Field's possible Singapore listing but the Chinese company said it had secured funding of $10 million from unnamed private investors.

Said Dr Ma in the statement: 'We have already secured some big sales orders, so even though the funding of $10 million will only enable us to achieve a production capacity of 10MW for now, it is nevertheless a good platform for our future growth and expansion.'

Said Mr Koh: 'We haven't given up on the company. We have seen work done - but that is not the same as strict regulatory compliance.'

He also talked about his experience of working in Shanghai, seeing it taking off when many people had not believed it would, and of how many Chinese companies had leapfrogged their rivals. 'To critics who think it's impossible, they should look at the last 10 years, and see what miracles have happened.'

ann@sph.com.sg