Graubard Miller The Chrysler Building 405 Lexington Avenue New York, N.Y. 10174-1901 (212) 818-8800 | ||
| facsimile | direct dial number | |
| (212) 818-8881 | (212) 818-8638 | |
| email address | ||
| jgallant@graubard.com |
July 10, 2013
VIA FEDERAL EXPRESS AND EDGAR
Securities and Exchange Commission
Mail Stop 7010
100 F Street, NE
Washington, DC 20549
Attention: Pamela A. Long
| Re: | Plastec Technologies, Ltd. |
| Amendment No. 2 to Registration Statement on Form F-1 | |
| Filed May 15, 2013 | |
| Response Date: May 23, 2013 | |
| File No. 333-185212 |
Dear Ms. Long:
On behalf of Plastec Technologies, Ltd. (the “Company”), we respond as follows to the Staff’s comment letter, dated June 11, 2013, relating to the above-captioned Registration Statement. Please note that for the Staff’s convenience, we have recited each of the Staff’s comments and provided the Company’s response to each comment immediately thereafter.
Form F-1/A filed May 15, 2013
Risk Factors, page 5
| 1. | We appreciate your response to comment 1 in your letter date May 28, 2013, and have some additional questions. For each balance sheet line item, please provide us with an analysis of the amounts excluded from your calculation of restricted net assets and explain their nature and why they do not qualify as restricted net assets. For example, we note the vast majority of your property, plant and equipment has not been included in calculating restricted net assets, while almost all of your plants are located in the PRC. In addition, as requested in our prior comment, please clarify that each of these assets may be transferred to the parent in the form of loans, dividends, etc., without a third party’s consent. |
Securities and Exchange Commission
July 10, 2013
Page 2
Attached hereto as Exhibit Ais a tabulated summary of the Company’s group assets by locations along with an explanation of the amounts included and excluded from its restricted net assets calculation to date as requested.
Upon further reflection of the Staff’s comment, the Company has determined to include condensed parent only financial statements of the Company in the Registration Statement. We therefore have revised the disclosure in the Registration Statement accordingly.
*****
If you have any questions, please do not hesitate to contact me at the above telephone and facsimile numbers.
| Sincerely, | |
| /s/ Jeffrey M. Gallant | |
| Jeffrey M. Gallant |
| cc: | Ho Leung Ning |
Securities and Exchange Commission
July 10, 2013
Page 3
EXHIBIT A
For the year ended April 30, 2012
| Consolidated | Restricted | Non-restricted (Assets and Liabilities owned by Non-PRC subsidiaries) | ||||||||||||||||
| HK$’000 | HK$’000 | Classification by physical location:- | ||||||||||||||||
| <A> | <B> | <C> | <C> | <D> | ||||||||||||||
| Located in PRC | Reasons for not included in Restricted Net Assets | Location in HK | Located in Macau | Reasons for not included in Restricted Net Assets | Located in Thailand | Reasons for not included in Restricted Net Assets | ||||||||||||
| Current Assets | ||||||||||||||||||
| Cash and cash equivalents | 199,818 | 30,923 | - | 160,103 | 7,970 | No such restriction for these assets | 822 | No distributable net assets | ||||||||||
| Trade receivables | 282,869 | 10,663 | - | 271,886 | 320 | No such restriction for these assets | - | |||||||||||
| Inventories | 128,387 | 1,655 | 126,732 | Raw materials were imported by our non-PRC subsidiaries (more precisely, the foreign parties under the processing arrangements/import processing arrangements) to PRC processing factories/wholly owned foreign enterprises for manufacturing purposes under processing/import processing arrangements for export sales. The ownership of these raw materials and work-in-process/finished goods subsequently produced remained as assets of our non-PRC subsidiaries. After deliveries to our customers, these became sales of the non-PRC susbsidiaries and thus their account receivables. Customers settled these account receivables directly in Hong Kong with the non-PRC subsidiaries. We have therefore regarded these as non-restricted assets, as account receivables were booked and settled in Hong Kong directly. | - | - | - | |||||||||||
| Deposits, prepayment and other receivables | 20,514 | 2,385 | 1,503 | Current portion of prepaid lease payments with the underlying leases in PRC. Please refer to below "Prepaid lease payments". | 14,251 | 55 | No such restriction for these assets | 2,320 | No distributable net assets | |||||||||
| Amounts due from immediate holding company | - | 23,887 | (23,887 | ) | ||||||||||||||
| Property, plant and equipment | 524,137 | 58,481 | 465,653 | Our non-PRC susbsidaries (more precisely, the foreign parties under the processing arrangements) had to provide plant and machineries for use of and by processing factories, according to the processing arrangements. Whilst these plant and machineries were located in the processing factories physically, their ownerships had all along been vested with our non-PRC subsidiaries. There were no legal impediments, as far as we have ascertained from our PRC attorneys, restricting their transfers to the parent after properly completing all the formalities and procedures. It is on this basis that we have considered such category of assets to be non-restricted assets. | - | 3 | No such restriction for these assets | - | ||||||||||
| Prepaid lease payments | 24,753 | 988 | 23,765 | Non-current portion of prepaid lease payments with the underlying leases in PRC were assets of our non-PRC subsidiary of whichwe have considered them to be in the non-restricted assets category. | - | - | - | |||||||||||
| Other assets | 12,813 | - | - | 12,813 | - | No such restriction for these assets | - | |||||||||||
| Intangible assets | 438 | - | 438 | Intangible assets of our non-PRC subsidiary. We have considered them to be non-restricted assets. | - | - | - | |||||||||||
| Total assets | 1,193,729 | 128,982 | 618,091 | 435,167 | 8,348 | 3,142 | ||||||||||||
| Current liabilities | ||||||||||||||||||
| Borrowings | (156,866 | ) | - | - | (156,866 | ) | - | No such restriction for these assets | - | |||||||||
| Short term finance lease obligations | (303 | ) | - | - | (303 | ) | - | No such restriction for these assets | - | |||||||||
| Trade payables | (121,964 | ) | (2,836 | ) | - | (118,262 | ) | (866 | ) | No such restriction for these assets | - | |||||||
| Other payables and accruals | (115,109 | ) | (5,591 | ) | - | (104,017 | ) | (5,465 | ) | No such restriction for these assets | (36 | ) | No distributable net assets | |||||
| Tax payable | (72,936 | ) | (4,256 | ) | - | (56,391 | ) | (12,289 | ) | No such restriction for these assets | - | |||||||
| Deferred tax liabilities | (14,504 | ) | - | - | (14,504 | ) | - | No such restriction for these assets | - | |||||||||
| Total liabilities | (481,682 | ) | (12,683 | ) | 0 | (450,344 | ) | (18,620 | ) | (36 | ) | |||||||
| Net assets | 712,047 | 116,299 | 618,091 | (15,177 | ) | (10,272 | ) | 3,106 | ||||||||||
NOTE:
| <A> | Assumptions to include the items for Restricted Net Assets: |
| All cash and bank balances in the PRC; | |
| Trade receivables, inventories, deposits, prepayments and other receivables, and amounts due from immediate holding company (which were trading in nature and not loans nor advances) booked in the Company’s PRC subsidiaries; | |
| Property, plant and equipment owned by the Company’s PRC subsidiaries which were located in the PRC; | |
| Prepaid lease payments in the PRC; | |
| Trade payables, other payables and accruals booked in the Company’s PRC subsidiaries; and | |
| Tax payables and deferred tax liabilities in the Company’s PRC subsidiaries. | |
| <B> | Thesewere assets owned by non-PRC subsidiaries but physically located in the PRC |
| <C> | No such restriction in HK and Macau |
| <D> | Our Thailand subsidiary was in pilot run and loss making, no net assets be distributable as at balance sheet date |
For 8-month ended December 31, 2012
| Consolidated | Restricted | Non-restricted (Assets and Liabilities owned by Non-PRC subsidiaries) | ||||||||||||||||||
| HK$’000 | HK$’000 | Classification by physical location:- | ||||||||||||||||||
| <A> | <B> | <C> | <C> | <D> | <E> | |||||||||||||||
| Located in PRC | Reasons for not included in Restricted Net Assets | Location in HK | Located in Macau | Reasons for not included in Restricted Net Assets | Located in Thailand | Reasons for not included in Restricted Net Assets | Located in US | |||||||||||||
| Current Assets | ||||||||||||||||||||
| Cash and cash equivalents | 309,862 | 61,012 | 204,471 | 28,565 | No such restriction for these assets | 14,103 | No distributable net assets | 1,711 | ||||||||||||
| Trade receivables | 257,299 | 23,602 | 222,972 | 10,621 | No such restriction for these assets | 104 | No distributable net assets | - | ||||||||||||
| Inventories | 97,467 | 59,636 | 37,135 | Raw materials were imported by our non-PRC subsidiaries (more precisely, the foreign parties under the processing arrangements/import processing arrangements) to PRC processing factories/wholly owned foreign enterprises for manufacturing purposes under processing/import processing arrangements for export sales. The ownership of these raw materials and work-in-process/finished goods subsequently produced remained as assets of our non-PRC subsidiaries. After deliveries to our customers, these became sales of the non-PRC susbsidiaries and thus their account receivables. Customers settled these account receivables directly in Hong Kong with the non-PRC subsidiaries. We have therefore regarded these as non-restricted assets, as account receivables were booked and settled in Hong Kong directly. | - | - | 696 | No distributable net assets | ||||||||||||
| Deposits, prepayment and other receivables | 35,471 | 2,796 | 1,527 | Current portion of prepaid lease payments with the underlying leases in PRC. Please refer to below "Prepaid lease payments". | 28,792 | 26 | No such restriction for these assets | 2,330 | No distributable net assets | |||||||||||
| Amounts due from immediate holding company | - | 2,519 | (2,519 | ) | ||||||||||||||||
| Property, plant and equipment | 440,383 | 88,774 | 340,771 | Our non-PRC susbsidaries (more precisely, the foreign parties under the processing arrangements) had to provide plant and machineries for use of and by processing factories, according to the processing arrangements. Whilst these plant and machineries were located in the processing factories physically, their ownerships had all along been vested with our non-PRC subsidiaries. There were no legal impediments, as far as we have ascertained from our PRC attorneys, restricting their transfers to the parent after properly completing all the formalities and procedures. It is on this basis that we have considered such category of assets to be non-restricted assets. | 663 | 13 | No such restriction for these assets | 10,162 | No distributable net assets | |||||||||||
| Prepaid lease payments | 23,719 | 972 | 22,747 | Non-current portion of prepaid lease payments with the underlying leases in PRC were assets of our non-PRC subsidiary of whichwe have considered them to be in the non-restricted assets category. | - | - | - | |||||||||||||
| Other assets | 14,503 | - | 14,503 | - | No such restriction for these assets | - | ||||||||||||||
| Intangible assets | 438 | - | 438 | Intangible assets of our non-PRC subsidiary. We have considered them to be non-restricted assets. | - | - | - | |||||||||||||
| Total assets | 1,179,142 | 239,311 | 402,617 | 468,882 | 39,225 | 27,395 | 1,711 | |||||||||||||
| Current liabilities | ||||||||||||||||||||
| Borrowings | (96,892 | ) | - | (96,892 | ) | - | No such restriction for these assets | - | ||||||||||||
| Trade payables | (151,436 | ) | (39,925 | ) | (101,329 | ) | (10,182 | ) | No such restriction for these assets | - | ||||||||||
| Other payables and accruals | (115,715 | ) | (19,188 | ) | (86,287 | ) | (10,196 | ) | No such restriction for these assets | (44 | ) | No distributable net assets | ||||||||
| Tax payable | (25,225 | ) | (8,033 | ) | (4,903 | ) | (12,289 | ) | No such restriction for these assets | - | ||||||||||
| Deferred tax (liabilities)/assets | (11,629 | ) | 2,732 | (14,361 | ) | - | No such restriction for these assets | - | ||||||||||||
| Total liabilities | (400,897 | ) | (64,414 | ) | 0 | (303,772 | ) | (32,667 | ) | (44 | ) | 0 | ||||||||
| Net assets | 778,245 | 174,897 | 402,617 | 165,110 | 6,558 | 27,351 | 1,711 | |||||||||||||
NOTE:
| <A> | Assumptions to include the items for Restricted Net Assets: |
| All cash and bank balances in the PRC; | |
| Trade receivables, inventories, deposits, prepayments and other receivables, and amounts due from immediate | |
| holding company (which were trading in nature and not loans nor advances) booked in the Company’s PRC subsidiaries; | |
| Property, plant and equipment owned by the Company’s PRC subsidiaries which were located in the PRC; | |
| Prepaid lease payments in the PRC; | |
| Trade payables, other payables and accruals booked in the Company’s PRC subsidiaries; and | |
| Tax payables and deferred tax liabilities in the Company’s PRC subsidiaries. | |
| <B> | These were assets owned by non-PRC subsidiaries but physically located in the PRC |
| <C> | No such restriction in HK and Macau |
| <D> | Our Thailand subsidiaries were in pilot run and loss making, no net assets be distributable as at balance sheet date |
| <E> | Parent's assets in US |
