SeaCo Ltd.; Notice of Application, 13803-13805 [2010-6303]
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jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 55 / Tuesday, March 23, 2010 / Notices
Administration, Office of Government
Contracting, 409 3rd Street, SW., Suite
8800, Washington, DC 20416.
FOR FURTHER INFORMATION CONTACT: Ms.
Amy Garcia, Program Analyst, by
telephone at (202) 205–6842; by FAX at
(202) 481–1630; or by e-mail at
amy.garcia@sba.gov.
SUPPLEMENTARY INFORMATION: Section
8(a)(17) of the Small Business Act (Act),
15 U.S.C. 637(a)(17), and SBA’s
implementing regulations require that
recipients of Federal contracts set aside
for small businesses, SDVO small
businesses, or Participants in the SBA’s
8(a) BD Program provide the product of
a small business manufacturer or
processor, if the recipient is other than
the actual manufacturer or processor of
the product. This requirement is
commonly referred to as the
Nonmanufacturer Rule. 13 CFR
121.406(b), 125.15(c). Section
8(a)(17)(b)(iv) of the Act authorizes SBA
to waive the Nonmanufacturer Rule for
any ‘‘class of products’’ for which there
are no small business manufacturers or
processors available to participate in the
Federal market.
In order to be considered available to
participate in the Federal market for a
class of products, a small business
manufacturer must have submitted a
proposal for a contract solicitation or
received a contract from the Federal
government within the last 24 months.
13 CFR 121.1202(c). The SBA defines
‘‘class of products’’ based on the Office
of Management and Budget’s NAICS. In
addition, SBA uses PSCs to further
identify particular products within the
NAICS code to which a waiver would
apply. The SBA may then identify a
specific item within a PSC and NAICS
to which a class waiver would apply.
The SBA is currently processing a
request to waive the Nonmanufacturer
Rule for LPG, PSC 6830 (Compressed
and Liquefied Gases), under NAICS
code 325120 (Industrial Gases
Manufacturing). The public is invited to
comment or provide source information
to SBA on the proposed waiver of the
Nonmanufacturer Rule for this product
within 15 days after date of publication
in the Federal Register. In addition,
SBA received several responses to the
January 12, 2010, notice from dealers
who believe that NAICS code 454312
(Liquefied Petroleum Gas (Bottled Gas)
Dealers) is the appropriate NAICS code
for this industry. However, wholesale
and retail NAICS codes are not
applicable to government procurements.
13 CFR 121.201. A procurement for
supplies should be classified under the
appropriate manufacturing or supply
NAICS code. 13 CFR 121.402(b). A firm
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16:31 Mar 22, 2010
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can qualify as a non-manufacturer on
such a procurement if it meets the
requirements of 13 CFR 121.406.
Karen Hontz,
Director, Office of Government Contracting.
[FR Doc. 2010–6355 Filed 3–22–10; 8:45 am]
BILLING CODE 8025–01–P
13803
The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
SUPPLEMENTARY INFORMATION:
Applicant’s Representations
1. SeaCo, a Bermuda company, was
formed on August 22, 2008, to own,
[Investment Company Act Release No.
operate and manage a shipping
29176; File No. 812–13753]
container business throughout the
world. SeaCo acquired its businesses
SeaCo Ltd.; Notice of Application
from Sea Containers Limited (‘‘SCL’’)
March 17, 2010.
through a chapter 11 bankruptcy
AGENCY: Securities and Exchange
proceeding.1 SeaCo states that in
Commission (‘‘Commission’’).
addition to directly owning a fleet of
ACTION: Notice of application under
shipping containers (and, to a lesser
section 3(b)(2) of the Investment
degree, land containers), it also
Company Act of 1940 (‘‘Act’’).
conducts its business through its
wholly-owned subsidiaries and through
SUMMARY: Summary of Application:
a controlled company, GE SeaCo SRL
SeaCo Ltd. (‘‘SeaCo’’) seeks an order
(‘‘GE SeaCo’’), in a joint venture with
under section 3(b)(2) of the Act
General Electric Capital Corporation
declaring it to be primarily engaged in
(‘‘GECC’’).2
a business other than that of investing,
2. GE SeaCo is an operating company
reinvesting, owning, holding or trading
engaged in the business of leasing
in securities. SeaCo is primarily engaged marine containers to ocean carriers and
in the shipping container business.
shippers, leasing land containers, and
Applicant: SeaCo.
disposing of containers at the end of
DATES: Filing Dates: The application was their useful economic life. SeaCo
filed on Feb 9, 2009 and amended on
directly owns approximately 50% of the
March 4, 2010 and March 16, 2010.
outstanding voting securities of GE
Hearing or Notification of Hearing: An SeaCo, which entitles it to appoint four
order granting the application will be
members of GE SeaCo’s board of
issued unless the Commission orders a
managers (‘‘GE SeaCo Board’’). Since
hearing. Interested persons may request April 2006, GECC, which owns the
a hearing by writing to the
remaining 50% of the outstanding
Commission’s Secretary and serving
voting securities of GE SeaCo, has held
applicant with a copy of the request,
the right to appoint five of the nine
personally or by mail. Hearing requests
members of the GE SeaCo Board. SeaCo
should be received by the Commission
states that by virtue of its ownership
by 5:30 p.m. on April 8, 2010, and
stake, SeaCo controls GE SeaCo as
should be accompanied by proof of
defined in section 2(a)(9) of the Act.3
service on applicant, in the form of an
3. SeaCo represents that it actively
affidavit or, for lawyers, a certificate of
participates in the management and
service. Hearing requests should state
affairs of GE SeaCo. SeaCo states that it
the nature of the writer’s interest, the
conducts its shipping container
reason for the request, and the issues
business through GE SeaCo by making
contested. Persons who wish to be
decisions with GE SeaCo about the
notified of a hearing may request
repair, positioning, re-leasing or sale of
notification by writing to the
Commission’s Secretary.
1 United States Bankruptcy Court for the District
of Delaware, Case No. 06–11156 (KJC).
ADDRESSES: Secretary, U.S. Securities
2 As described more fully in the application,
and Exchange Commission, 100 F
SeaCo finances the activities of, and collects
Street, NE., Washington, DC 20549–
revenues from, its other subsidiaries through its
1090; Applicant: Jonathan Adams,
direct, wholly-owned subsidiary, SeaCo Finance
SeaCo Ltd., 22 Victoria Street, P.O. Box
Ltd. (‘‘SC Finance’’). While SeaCo owns its voting
interest in GE SeaCo directly, it owns its economic
HM 1179, Hamilton HM EX, Bermuda.
interest in GE SeaCo indirectly through SC Finance
FOR FURTHER INFORMATION CONTACT:
and certain other intermediate, wholly-owned
Steven I. Amchan, Senior Counsel, at
subsidiaries.
3 Section 2(a)(9) of the Act defines ‘‘control’’ as the
(202) 551–6826, or Julia Kim Gilmer,
power to exercise a controlling influence over the
Branch Chief, at (202) 551–6821
management or policies of a company, and creates
(Division of Investment Management,
a presumption that an owner of more than 25% of
Office of Investment Company
the outstanding voting securities of a company
controls the company.
Regulation).
SECURITIES AND EXCHANGE
COMMISSION
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Federal Register / Vol. 75, No. 55 / Tuesday, March 23, 2010 / Notices
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its containers. SeaCo also states that,
working in partnership with GECC, it
provides strategic direction to
management; provides policies for
retaining, recruiting and incentivizing
GE SeaCo management; makes container
asset purchase decisions; reviews and
sets marketing and credit review
policies; oversees information
technology development and corporate
restructuring; and reviews internal
control systems and reviews and
approves financial statements. SeaCo
further states that its representation on
the GE SeaCo Board permits SeaCo to
block certain actions that require the
approval of seven out of the nine
managers (such as the selection of
auditors, the seconding of employees to
GE SeaCo from GECC and its affiliates
and the conversion of GE SeaCo to a
new corporate form). Finally, SeaCo
states that it has maintained strong
shareholder rights, which include the
power to block various transactions that
require a super-majority vote of
shareholders (including certain sales
transactions, amending the articles of
organization and increasing or
decreasing the number of managers or
the maximum or minimum number of
managers).
Applicant’s Legal Analysis
1. SeaCo requests an order under
section 3(b)(2) of the Act declaring that
it is primarily engaged in a business
other than that of investing, reinvesting,
owning, holding or trading in securities,
and therefore not an investment
company as defined in the Act.
2. Under section 3(a)(1)(C) of the Act,
an issuer is an investment company if
it is engaged or proposes to engage in
the business of investing, reinvesting,
owning, holding or trading in securities,
and owns or proposes to acquire
investment securities having a value in
excess of 40% of the value of the
issuer’s total assets (exclusive of
Government securities and cash items)
on an unconsolidated basis. Under
section 3(a)(2) of the Act, investment
securities include all securities except
Government securities, securities issued
by employees’ securities companies,
and securities issued by majority-owned
subsidiaries of the owner which (a) are
not investment companies, and (b) are
not relying on the exclusions from the
definition of investment company in
section 3(c)(1) or 3(c)(7) of the Act
(‘‘Investment Securities’’).
3. SeaCo states that its only assets on
an unconsolidated basis are its
investment in its direct, wholly-owned
subsidiary, SC Finance, and its holdings
of the outstanding voting securities of
GE SeaCo and another operating
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16:31 Mar 22, 2010
Jkt 220001
company, GE SeaCo America.4 SC
Finance may rely on section 3(c)(1) of
the Act because it indirectly holds the
economic interest in GE SeaCo, and
such interest may be deemed to be
Investment Securities. Therefore,
SeaCo’s assets on an unconsolidated
basis could be deemed to consist almost
entirely of Investment Securities.
Because more than 40% of SeaCo’s total
unconsolidated assets may consist of
Investment Securities, SeaCo may be
deemed an investment company within
the meaning of section 3(a)(1)(C) of the
Act.
4. Rule 3a–1 under the Act provides
an exemption from the definition of
investment company if, on a
consolidated basis with wholly-owned
subsidiaries, no more than 45% of an
issuer’s total assets (exclusive of
Government securities and cash items)
consist of, and no more than 45% of its
net income after taxes over the last four
fiscal quarters combined is derived
from, securities other than: Government
securities, securities issued by
employees’ securities companies, and
securities of certain majority-owned
subsidiaries and companies controlled
primarily by the issuer. SeaCo states
that due to GECC’s right to appoint an
additional manager to the GE SeaCo
Board, SeaCo is unable to rely on rule
3a–1 because it does not primarily
control GE SeaCo.
5. Section 3(b)(2) of the Act provides
that, notwithstanding section 3(a)(1)(C),
the Commission may issue an order
declaring an issuer to be primarily
engaged in a business other than that of
investing, reinvesting, owning, holding
or trading in securities directly, through
majority-owned subsidiaries, or
controlled companies conducting
similar types of businesses. SeaCo
submits that it qualifies for an order
under section 3(b)(2) of the Act because
it is primarily engaged in the shipping
container business through its whollyowned subsidiaries and through its
controlled company, GE SeaCo. In
determining whether an issuer is
‘‘primarily engaged’’ in a non-investment
company business under section 3(b)(2),
the Commission considers the following
factors: (a) The company’s historical
development, (b) its public
representation of policy, (c) the
activities of its officers and directors, (d)
4 GE SeaCo America employs United States staff
that handle operations, leasing and end-of-usefullife disposal of certain United States based
containers for GE SeaCo. SeaCo directly holds 40%
of GE SeaCo America’s outstanding voting
securities and operates less than 3% of its shipping
container business through GE SeaCo America.
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the nature of its present assets, and (e)
the sources of its present income.5
a. Historical Development. SeaCo
states that it is a Bermuda company
formed on August 22, 2008 specifically
for the primary purpose of engaging in
the shipping container business through
GE SeaCo. SeaCo states that it does not
treat its ownership of GE SeaCo’s
outstanding voting securities as
investment assets but as the mechanism
through which SeaCo operates,
conducts and controls its shipping
container business. SeaCo’s interest in
GE SeaCo arose from SCL’s historical
interest in GE SeaCo, which was
transferred to SeaCo as part of a chapter
11 plan of reorganization. SeaCo does
not intend to invest in any entity as a
passive investment or in portfolio
securities for short-term profits and will
not be a ‘‘special situation investment
company.’’ 6
b. Public Representations of Policy.
SeaCo states that it has never held itself
out as an investment company within
the meaning of the Act, and has not
made any public representations that
would indicate that it is in any business
other than that of operating a shipping
container business. With respect to GE
SeaCo, SeaCo has and intends to
consistently report its strategy as
participating actively in its operations
through its GE SeaCo Board
representatives, shareholder rights, and
substantial information rights.
c. Activities of Officers and Directors.
SeaCo states that the majority of its
board of directors and executive
management team has significant
experience in the shipping container
industry and/or managing turnarounds
in the operations of companies emerging
from bankruptcy. SeaCo states that none
of these individuals spends, or proposes
to spend, any material amount of time
on behalf of SeaCo or GE SeaCo in
activities which involve investing,
reinvesting, owning, holding, or trading
in securities, directly or indirectly
through others. SeaCo anticipates that
any time spent on such activities by
these individuals would be de minimis.
SeaCo further states that the members of
its board of directors (which include
four directors who also serve on the GE
SeaCo Board), spend between 20–40%
of their time on monitoring the
performance of GE SeaCo operations, 7–
10% of their time making decisions
regarding the owned container fleet, 20–
30% of their time on investor
communications, 13–15% of their time
5 Tonopah Mining Company of Nevada, 26 SEC
426, 427 (1947).
6 SCL also is not and was not a ‘‘special situation
investment company.’’
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Federal Register / Vol. 75, No. 55 / Tuesday, March 23, 2010 / Notices
jlentini on DSKJ8SOYB1PROD with NOTICES
on management oversight and 20–25%
of their time providing strategic
direction. SeaCo states that its only
executive officer, the Chief Executive
Officer, does not spend his time on
activities which involve investing,
reinvesting, owning, holding or trading
in securities, and its three employees
split their time between accountancy,
contract management, billing and
collections, investor communications
and office administration. SeaCo does
not, directly or indirectly, employ
securities analysts or engage in the
trading of securities for speculative or
other purposes.
d. Nature of Assets. As a holding
company, SeaCo asserts that its
financial data consolidated with its
wholly-owned subsidiaries provides a
more accurate picture of its business.
SeaCo states that, as of June 30, 2009,
its interests in GE SeaCo represented
50% of its total assets, consolidated
with its wholly-owned subsidiaries. Of
SeaCo’s remaining total assets,
consolidated with its wholly-owned
subsidiaries, SeaCo’s owned container
fleet represented 26%, amounts
receivable from container leasing
represented 7%, and other assets
consisting mainly of deferred finance
charges represented 2%. Treating the
interests in GE SeaCo as an operating
asset, SeaCo’s remaining Investment
Securities constituted less than 15% of
SeaCo’s total assets, consolidated with
its wholly-owned subsidiaries.7
e. Sources of Income. SeaCo states
that on an unconsolidated basis it has
no or minimal income from its
ownership of SC Finance, which
receives revenues from SeaCo’s other
subsidiaries. Applicant states that
revenues constitute the primary source
of its income. On a consolidated basis
with its wholly-owned subsidiaries,
SeaCo states that, for the period ending
June 30, 2009, its proportionate share of
the revenues of GE SeaCo represented
32%, revenues on the owned container
fleet managed by GE SeaCo represented
67%, and interest income represented
1%, of its total income.
6. SeaCo thus submits that it qualifies
for an order under section 3(b)(2) of the
Act.
7 Of SeaCo’s remaining Investment Securities,
consolidated with its wholly-owned subsidiaries,
restricted cash to service the SeaCo Group’s loan
facilities represented 10%, cash and cash
equivalents for operational purposes represented
2%, securities issued by GE SeaCo America
represented 2%, and the amount due from SCL
arising out of bankruptcy process represented 1%.
VerDate Nov<24>2008
16:31 Mar 22, 2010
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For the Commission, by the Division of
Investment Management, under delegated
authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–6303 Filed 3–22–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
Aspen Group Resources Corp.,
Commercial Concepts, Inc., Desert
Health Products, Inc., Equalnet
Communications Corp., Geneva Steel
Holdings Corp., Orderpro Logistics,
Inc. (n/k/a Securus Renewable Energy,
Inc.), and Sepragen Corp.; Order of
Suspension of Trading
13805
concerning the securities of Sepragen
Corp. because it has not filed any
periodic reports since the period ended
September 30, 2002.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
companies. Therefore, it is ordered,
pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that
trading in the securities of the abovelisted companies is suspended for the
period from 9:30 a.m. EDT on March 19,
2010, through 11:59 p.m. EDT on April
1, 2010.
By the Commission.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–6447 Filed 3–19–10; 11:15 am]
BILLING CODE 8011–01–P
March 19, 2010.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Aspen
Group Resources Corp. because it has
not filed any periodic reports since the
period ended December 31, 2003.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Commercial
Concepts, Inc. because it has not filed
any periodic reports since the period
ended November 30, 2002.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Desert
Health Products, Inc. because it has not
filed any periodic reports since the
period ended December 31, 2005.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Equalnet
Communications Corp. because it has
not filed any periodic reports since the
period ended March 31, 2000.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Geneva
Steel Holdings Corp. because it has not
filed any periodic reports since the
period ended September 30, 2001.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Orderpro
Logistics, Inc. (n/k/a Securus Renewable
Energy, Inc.) because it has not filed any
periodic reports since the period ended
September 30, 2004.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
PO 00000
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DEPARTMENT OF STATE
[Public Notice 6925]
Culturally Significant Objects Imported
for Exhibition Determinations: ‘‘Race to
the End of the Earth’’
SUMMARY: Notice is hereby given of the
following determinations: Pursuant to
the authority vested in me by the Act of
October 19, 1965 (79 Stat. 985; 22 U.S.C.
2459), Executive Order 12047 of March
27, 1978, the Foreign Affairs Reform and
Restructuring Act of 1998 (112 Stat.
2681, et seq.; 22 U.S.C. 6501 note, et
seq.), Delegation of Authority No. 234 of
October 1, 1999, Delegation of Authority
No. 236 of October 19, 1999, as
amended, and Delegation of Authority
No. 257 of April 15, 2003 [68 FR 19875],
I hereby determine that the objects to be
included in the exhibition ‘‘Race to the
End of the Earth,’’ imported from abroad
for temporary exhibition within the
United States, are of cultural
significance. The objects are imported
pursuant to loan agreements with the
foreign owners or custodians. I also
determine that the exhibition or display
of the exhibit objects at the American
Museum of Natural History, New York,
NY, from on or about May 25, 2010,
until on or about January 3, 2011, and
at possible additional exhibitions or
venues yet to be determined, is in the
national interest. Public Notice of these
Determinations is ordered to be
published in the Federal Register.
FOR FURTHER INFORMATION CONTACT: For
further information, including a list of
the exhibit objects, contact Carol B.
Epstein, Attorney-Adviser, Office of the
Legal Adviser, U.S. Department of State
(telephone: 202/632–6473). The address
is U.S. Department of State, SA–5, L/PD,
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]]>Agencies
[Federal Register Volume 75, Number 55 (Tuesday, March 23, 2010)]
[Notices]
[Pages 13803-13805]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-6303]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 29176; File No. 812-13753]
SeaCo Ltd.; Notice of Application
March 17, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application under section 3(b)(2) of the Investment
Company Act of 1940 (``Act'').
-----------------------------------------------------------------------
SUMMARY: Summary of Application: SeaCo Ltd. (``SeaCo'') seeks an order
under section 3(b)(2) of the Act declaring it to be primarily engaged
in a business other than that of investing, reinvesting, owning,
holding or trading in securities. SeaCo is primarily engaged in the
shipping container business.
Applicant: SeaCo.
DATES: Filing Dates: The application was filed on Feb 9, 2009 and
amended on March 4, 2010 and March 16, 2010.
Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicant with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on April 8, 2010, and should be accompanied by proof of
service on applicant, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090; Applicant: Jonathan Adams,
SeaCo Ltd., 22 Victoria Street, P.O. Box HM 1179, Hamilton HM EX,
Bermuda.
FOR FURTHER INFORMATION CONTACT: Steven I. Amchan, Senior Counsel, at
(202) 551-6826, or Julia Kim Gilmer, Branch Chief, at (202) 551-6821
(Division of Investment Management, Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at https://www.sec.gov/search/search.htm or
by calling (202) 551-8090.
Applicant's Representations
1. SeaCo, a Bermuda company, was formed on August 22, 2008, to own,
operate and manage a shipping container business throughout the world.
SeaCo acquired its businesses from Sea Containers Limited (``SCL'')
through a chapter 11 bankruptcy proceeding.\1\ SeaCo states that in
addition to directly owning a fleet of shipping containers (and, to a
lesser degree, land containers), it also conducts its business through
its wholly-owned subsidiaries and through a controlled company, GE
SeaCo SRL (``GE SeaCo''), in a joint venture with General Electric
Capital Corporation (``GECC'').\2\
---------------------------------------------------------------------------
\1\ United States Bankruptcy Court for the District of Delaware,
Case No. 06-11156 (KJC).
\2\ As described more fully in the application, SeaCo finances
the activities of, and collects revenues from, its other
subsidiaries through its direct, wholly-owned subsidiary, SeaCo
Finance Ltd. (``SC Finance''). While SeaCo owns its voting interest
in GE SeaCo directly, it owns its economic interest in GE SeaCo
indirectly through SC Finance and certain other intermediate,
wholly-owned subsidiaries.
---------------------------------------------------------------------------
2. GE SeaCo is an operating company engaged in the business of
leasing marine containers to ocean carriers and shippers, leasing land
containers, and disposing of containers at the end of their useful
economic life. SeaCo directly owns approximately 50% of the outstanding
voting securities of GE SeaCo, which entitles it to appoint four
members of GE SeaCo's board of managers (``GE SeaCo Board''). Since
April 2006, GECC, which owns the remaining 50% of the outstanding
voting securities of GE SeaCo, has held the right to appoint five of
the nine members of the GE SeaCo Board. SeaCo states that by virtue of
its ownership stake, SeaCo controls GE SeaCo as defined in section
2(a)(9) of the Act.\3\
---------------------------------------------------------------------------
\3\ Section 2(a)(9) of the Act defines ``control'' as the power
to exercise a controlling influence over the management or policies
of a company, and creates a presumption that an owner of more than
25% of the outstanding voting securities of a company controls the
company.
---------------------------------------------------------------------------
3. SeaCo represents that it actively participates in the management
and affairs of GE SeaCo. SeaCo states that it conducts its shipping
container business through GE SeaCo by making decisions with GE SeaCo
about the repair, positioning, re-leasing or sale of
[[Page 13804]]
its containers. SeaCo also states that, working in partnership with
GECC, it provides strategic direction to management; provides policies
for retaining, recruiting and incentivizing GE SeaCo management; makes
container asset purchase decisions; reviews and sets marketing and
credit review policies; oversees information technology development and
corporate restructuring; and reviews internal control systems and
reviews and approves financial statements. SeaCo further states that
its representation on the GE SeaCo Board permits SeaCo to block certain
actions that require the approval of seven out of the nine managers
(such as the selection of auditors, the seconding of employees to GE
SeaCo from GECC and its affiliates and the conversion of GE SeaCo to a
new corporate form). Finally, SeaCo states that it has maintained
strong shareholder rights, which include the power to block various
transactions that require a super-majority vote of shareholders
(including certain sales transactions, amending the articles of
organization and increasing or decreasing the number of managers or the
maximum or minimum number of managers).
Applicant's Legal Analysis
1. SeaCo requests an order under section 3(b)(2) of the Act
declaring that it is primarily engaged in a business other than that of
investing, reinvesting, owning, holding or trading in securities, and
therefore not an investment company as defined in the Act.
2. Under section 3(a)(1)(C) of the Act, an issuer is an investment
company if it is engaged or proposes to engage in the business of
investing, reinvesting, owning, holding or trading in securities, and
owns or proposes to acquire investment securities having a value in
excess of 40% of the value of the issuer's total assets (exclusive of
Government securities and cash items) on an unconsolidated basis. Under
section 3(a)(2) of the Act, investment securities include all
securities except Government securities, securities issued by
employees' securities companies, and securities issued by majority-
owned subsidiaries of the owner which (a) are not investment companies,
and (b) are not relying on the exclusions from the definition of
investment company in section 3(c)(1) or 3(c)(7) of the Act
(``Investment Securities'').
3. SeaCo states that its only assets on an unconsolidated basis are
its investment in its direct, wholly-owned subsidiary, SC Finance, and
its holdings of the outstanding voting securities of GE SeaCo and
another operating company, GE SeaCo America.\4\ SC Finance may rely on
section 3(c)(1) of the Act because it indirectly holds the economic
interest in GE SeaCo, and such interest may be deemed to be Investment
Securities. Therefore, SeaCo's assets on an unconsolidated basis could
be deemed to consist almost entirely of Investment Securities. Because
more than 40% of SeaCo's total unconsolidated assets may consist of
Investment Securities, SeaCo may be deemed an investment company within
the meaning of section 3(a)(1)(C) of the Act.
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\4\ GE SeaCo America employs United States staff that handle
operations, leasing and end-of-useful-life disposal of certain
United States based containers for GE SeaCo. SeaCo directly holds
40% of GE SeaCo America's outstanding voting securities and operates
less than 3% of its shipping container business through GE SeaCo
America.
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4. Rule 3a-1 under the Act provides an exemption from the
definition of investment company if, on a consolidated basis with
wholly-owned subsidiaries, no more than 45% of an issuer's total assets
(exclusive of Government securities and cash items) consist of, and no
more than 45% of its net income after taxes over the last four fiscal
quarters combined is derived from, securities other than: Government
securities, securities issued by employees' securities companies, and
securities of certain majority-owned subsidiaries and companies
controlled primarily by the issuer. SeaCo states that due to GECC's
right to appoint an additional manager to the GE SeaCo Board, SeaCo is
unable to rely on rule 3a-1 because it does not primarily control GE
SeaCo.
5. Section 3(b)(2) of the Act provides that, notwithstanding
section 3(a)(1)(C), the Commission may issue an order declaring an
issuer to be primarily engaged in a business other than that of
investing, reinvesting, owning, holding or trading in securities
directly, through majority-owned subsidiaries, or controlled companies
conducting similar types of businesses. SeaCo submits that it qualifies
for an order under section 3(b)(2) of the Act because it is primarily
engaged in the shipping container business through its wholly-owned
subsidiaries and through its controlled company, GE SeaCo. In
determining whether an issuer is ``primarily engaged'' in a non-
investment company business under section 3(b)(2), the Commission
considers the following factors: (a) The company's historical
development, (b) its public representation of policy, (c) the
activities of its officers and directors, (d) the nature of its present
assets, and (e) the sources of its present income.\5\
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\5\ Tonopah Mining Company of Nevada, 26 SEC 426, 427 (1947).
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a. Historical Development. SeaCo states that it is a Bermuda
company formed on August 22, 2008 specifically for the primary purpose
of engaging in the shipping container business through GE SeaCo. SeaCo
states that it does not treat its ownership of GE SeaCo's outstanding
voting securities as investment assets but as the mechanism through
which SeaCo operates, conducts and controls its shipping container
business. SeaCo's interest in GE SeaCo arose from SCL's historical
interest in GE SeaCo, which was transferred to SeaCo as part of a
chapter 11 plan of reorganization. SeaCo does not intend to invest in
any entity as a passive investment or in portfolio securities for
short-term profits and will not be a ``special situation investment
company.'' \6\
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\6\ SCL also is not and was not a ``special situation investment
company.''
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b. Public Representations of Policy. SeaCo states that it has never
held itself out as an investment company within the meaning of the Act,
and has not made any public representations that would indicate that it
is in any business other than that of operating a shipping container
business. With respect to GE SeaCo, SeaCo has and intends to
consistently report its strategy as participating actively in its
operations through its GE SeaCo Board representatives, shareholder
rights, and substantial information rights.
c. Activities of Officers and Directors. SeaCo states that the
majority of its board of directors and executive management team has
significant experience in the shipping container industry and/or
managing turnarounds in the operations of companies emerging from
bankruptcy. SeaCo states that none of these individuals spends, or
proposes to spend, any material amount of time on behalf of SeaCo or GE
SeaCo in activities which involve investing, reinvesting, owning,
holding, or trading in securities, directly or indirectly through
others. SeaCo anticipates that any time spent on such activities by
these individuals would be de minimis. SeaCo further states that the
members of its board of directors (which include four directors who
also serve on the GE SeaCo Board), spend between 20-40% of their time
on monitoring the performance of GE SeaCo operations, 7-10% of their
time making decisions regarding the owned container fleet, 20-30% of
their time on investor communications, 13-15% of their time
[[Page 13805]]
on management oversight and 20-25% of their time providing strategic
direction. SeaCo states that its only executive officer, the Chief
Executive Officer, does not spend his time on activities which involve
investing, reinvesting, owning, holding or trading in securities, and
its three employees split their time between accountancy, contract
management, billing and collections, investor communications and office
administration. SeaCo does not, directly or indirectly, employ
securities analysts or engage in the trading of securities for
speculative or other purposes.
d. Nature of Assets. As a holding company, SeaCo asserts that its
financial data consolidated with its wholly-owned subsidiaries provides
a more accurate picture of its business. SeaCo states that, as of June
30, 2009, its interests in GE SeaCo represented 50% of its total
assets, consolidated with its wholly-owned subsidiaries. Of SeaCo's
remaining total assets, consolidated with its wholly-owned
subsidiaries, SeaCo's owned container fleet represented 26%, amounts
receivable from container leasing represented 7%, and other assets
consisting mainly of deferred finance charges represented 2%. Treating
the interests in GE SeaCo as an operating asset, SeaCo's remaining
Investment Securities constituted less than 15% of SeaCo's total
assets, consolidated with its wholly-owned subsidiaries.\7\
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\7\ Of SeaCo's remaining Investment Securities, consolidated
with its wholly-owned subsidiaries, restricted cash to service the
SeaCo Group's loan facilities represented 10%, cash and cash
equivalents for operational purposes represented 2%, securities
issued by GE SeaCo America represented 2%, and the amount due from
SCL arising out of bankruptcy process represented 1%.
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e. Sources of Income. SeaCo states that on an unconsolidated basis
it has no or minimal income from its ownership of SC Finance, which
receives revenues from SeaCo's other subsidiaries. Applicant states
that revenues constitute the primary source of its income. On a
consolidated basis with its wholly-owned subsidiaries, SeaCo states
that, for the period ending June 30, 2009, its proportionate share of
the revenues of GE SeaCo represented 32%, revenues on the owned
container fleet managed by GE SeaCo represented 67%, and interest
income represented 1%, of its total income.
6. SeaCo thus submits that it qualifies for an order under section
3(b)(2) of the Act.
For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6303 Filed 3-22-10; 8:45 am]
BILLING CODE 8011-01-P
