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Re:
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ICO Global Communications
(Holdings) Limited
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Preliminary
Proxy Statement on Schedule 14A
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1.
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Comment: We
note in your preliminary proxy statement that you do not intend to issue
fractional shares in connection with your proposed reverse stock
split. We also note the recent disclosure in your annual report
on Form 10-K filed on March 31, 2009 that you had 372 record
holders of your Class A common stock as of March 5,
2009. We also note your disclosure on page 15 of your
preliminary proxy statement that you do not intend the reverse stock split
to be the first step in a going private transaction. Based on
your disclosures, however, it is possible that your proposed transaction
may implicate the rules relating to going private
transactions. Please advise us of your analysis as to the
applicability of Rule 13e-3 under the Securities Exchange Act of 1934
to your proposed reverse stock split and revise your preliminary proxy
statement to either disclose your analysis as to why Rule 13e-3 is
not implicated or, alternatively, to provide all additional disclosures
required under Rule 13e-3.
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Response: ICO believes that
Rule 13e-3 under the Securities Exchange Act of 1934 (“Exchange Act”)
is not applicable to the proposed reverse stock split. The
Company’s Class A common stock is listed on the Nasdaq Global Market, a
national securities exchange, and is registered pursuant to Section 12(b)
of the Exchange Act. Accordingly, whether a payment of cash in
lieu of fractional shares would be a Rule 13e-3 transaction depends on
whether the reverse stock split has either a “reasonable likelihood or
purpose of producing” the effect described in Rule 13e-3(a)(3)(ii)(B),
i.e., causing the Class A common stock to “be neither listed on any
national securities exchange nor authorized to be quoted on any
inter-dealer quotation system of any registered national securities
association.”
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The
proposed reverse stock split would not implicate this rule. To
begin with, the reverse stock split would not have the purpose of causing
the delisting of ICO’s Class A common stock. To the contrary,
as described in the Proxy Statement, a primary reason for effecting a
reverse stock split would be the belief of ICO’s board of directors that
the increase in stock price resulting from the reverse stock split would
reduce the risk that the Company’s Class A common stock would be delisted
from the Nasdaq Global Market.
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The
number of ICO’s holders of record of Class A common stock is not a
relevant consideration here. The number of recordholders of
ICO’s Class A common stock is relevant only if Rule 13e-3(a)(3)(ii)(A) is
applicable. Rule 13e-3(a)(3)(ii)(A), in turn, is applicable
only to a class of equity securities which is subject to Section 12(g) or
Section 15(d) of the Exchange Act. Section 12(g) does not apply
to the Company’s Class A common stock, according to Section 12(g)(2)(A),
because the Class A common stock is listed and registered on a national
securities exchange pursuant to Section 12(b). The provisions
of Section 15(d) do not apply to ICO’s Class A common stock because it is
already registered under Section 12 of the Exchange
Act.
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In
any event, the proposed reverse stock split would not implicate Rule
13e-3(a)(3)(ii)(A) even if it were applicable. A review of
ICO’s stockholder records and Cede participant listings indicates that the
payment of cash in lieu of fractional shares would not cause the Class A
common stock to be held at record by fewer than 300 persons, even assuming
that the maximum 20-for-1 reverse merger ratio is selected. In
calculating 372 record holders of ICO’s Class A common stock as of March
5, 2009, ICO treated Cede as a single record holder of 100,944,287
shares. If we follow the Rule 12(g)5-1 method of calculating
“held of record,” which is the method applicable for purposes of Section
12(g) and 15(d), the number of recordholders of ICO’s Class A common stock
increases to 1,633, more than 300 of which have holdings of 20 shares or
greater.
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We
have expanded the disclosure in the Proxy under the heading “Effects of
the Reverse Stock Split-No Going Private Transaction” to include our
analysis as to why Rule 13e-3 is not
implicated.
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the
Company is responsible for the adequacy and accuracy of the disclosure in
the filing;
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staff
comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the
filing; and
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the
Company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
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