Any production machinery or equipment is not exempt under 802.2c and must be separately valued. We agree that the non-machinery / equipment portion of the ethylene plant (as you describe below) is exempt.
Question
From: Whitehead, Nora
Sent: Monday, June 29, 2015 9:24 AM
To: (Redacted)
Cc: Gillis, Diana L.
Subject: RE: 802.2(c) Question
Hi (Redacted):
Any production machinery or equipment is not exempt under 802.2c and must be separately valued. We agree that the non-machinery/equipment portion of the ethylene plant (as you describe below) is exempt.
Nora Whitehead
(202) 326-3262
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From: (Redacted)
Sent: Thursday, June 25,2015 3:08 PM
To: Walsh, Kathryn E.; Berg, Karen E.; Whitehead, Nora; Gillis, Diana L.
Cc: (Redacted)
Subject: 802.2(c) Question
Hi all
I hope everyone survived the recent storms with their electricity! This is an 802.2(c) question. Facts
1. Acquired Person B, owns an ethylene plant. The plant has been idle since 2001.
2. Acquiring Person A, intends to acquire the plant site and associated assets from B for an acquisition price over the HSR filing threshold.
3. The assets include all of the permits, real property, a take away pipeline, and equipment and other assets associated with the plant.
4. The plant will require significant improvements prior to operating including, overhauling main furnaces, compressors, cold-section compressor &expander, BFW pumps and all other rotating and logistic equipment, replacing boilers, cooling towers, overhauling fire water pumps, rebuilding pipelines etc.
5. The plant has not, and will not have, derived over $5 million of revenues in the 36 months prior to closing.
We have included below copies of informal interpretations which we believe confirm the applicability of Rule 802.2(c) to the transaction in this case.
Please let us know if you agree that the mothballed ethylene plant and associated assets consisting of the land, offices, the ethylene steam facility (including furnaces, towers, scrubbers, splitters, tanks, driers etc.),ethylene pipelines (all idle),pipeline rights of way, associated permits and other miscellaneous equipment, are exempt under 802.2(c).
Many thanks as always for your guidance.