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Date
Rule
802.30
Staff
Alice Villavicencio
File Number
9610007
Response/Comments
Called writer on October 15, 1996, and explained that because X already controls Z (by holding51% of Zs voting stock) X's repurchase of Zs voting stock is exempt under Rule 802.30. Further, because Y is actively participating in having Z reacquire its voting stock and as a result cross a threshold (from the 25% threshold to the 50% threshold). In exchange for the v/s of Z,X will get a ship valued at more than 15.mm (exempt under 802.30). TH, VC, PS, HR agree.

Question

(redacted)

SENT VIA FACSIMILE


October 11, 1996


Alice Villavicencio, Esq.
Federal Trade Commission

re:Applicability of Exemption in 16 C.F.R. Section 802.30

Dear Alice:

As requested, I am writing to set forth the scenario which we discussed earlier today. Corporation X and Corporation Y own 51% and 49% of Corporation Z respectively. Corporation Z currently owns two ships, each of which has a value in excess of $15 million. The parties have decided to break up the joint venture and for tax reasons have elected to structure the transaction as follows: Corporation Z will repurchase the 51% of its shares held by Corporation X and as consideration will transfer to X one of the ships. After this transaction, Corporation Y will own all of the outstanding voting securities of Corporation Z which will continue to hold the remaining ship.


Please could you advise whether these transactions would be exempt by virtue of 16 C.F.R. Section 802.30. It seems to me that they would be since Corporation X is both the acquiring and acquired person, both with respect to the repurchase of shares in Corporation Z and with respect to the transfer of the ship from Corporation Z to Corporation X. I look forward to discussing this with you.


Many thanks. With best regards,



(redacted)

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