SEC Comment Letter for ASIA PACIFIC WIRE & CABLE CORP LTD (APWC) (CIK 0001026980) (APWC) — Dec 15, 2008
ASIA PACIFIC WIRE & CABLE CORP LTD (APWC) (CIK 0001026980)
Date: Dec. 15, 2008 · CIK: 0001026980 · Accession: 0000000000-08-061673
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-14542, 333-153796
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-7010
DIVISION OF CORPORATION FINANCE
Mail Stop 7010 December 15, 2008 Yuan Chun Tang Chief Executive Officer Asia Pacific Wire & Cable Corporation Limited 7/Fl. B, No. 132, Sec. 3 Min-Sheng East Road Taipei, 105, Taiwan People’s Republic of China Re: Asia Pacific Wire & Cable Corporation Limited Amendment No. 1 to Form F-1 Filed November 26, 2008 File No. 333-153796
Form 20-F for the year ended December 31, 2007 Filed June 27, 2008 File No. 001-14542 Dear Mr. Tang:
We have reviewed your filings and have the following comments. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Form F-1
General
1. Briefly describe the nature of the cr iminal proceedings against former PEWC officers and directors and describe the malfeasance that led to the delisting from the Taipei Stock Exchange. Summary, page 1
2. Please provide an organizational chart in the summary which includes your joint venture ownerships. Risk Factors, page 5
3. Please include a risk factor about your default on the PEWC loan.
Yuan Chun Tang Asia Pacific Wire & Cable Corporation Limited December 15, 2008 Page 2 Certain Historical Information Regarding Own ership and Control of the Company, page 4. Please clarify who Set Top International is and briefly describe what the litigation between them and PEWC related to. 5. Please describe how the Option Agreement came about and disclose its purpose. 6. Please explain carried interest and clarif y whether PEWC is still paying it. Clarify whether the purchase price was funded w ith debt by Sino JP. Disclose why the transaction was structured to include carri ed interest and how it is accounted for by each of the parties. 5.4 - Liquidity and Capital Resources, page 47
7. We note your response to prior comment 32 and your revised disclosure. Your discussion of the cash flow statement a nd the factors that drive cash flows does not provide information for the period ending June 30, 2008. Please revise to provide a balanced discussion of the factor s that drive cash flow s, explanations of the reason for increases and decreases in your cash flows including the reasons for the changes in operating assets and liabilities for the most recent period. Additionally, ensure that your discussi on for the interim period discusses the significant impact accounts receivable s and inventory had on operating cash flows. Refer to FRR No. 72-501.13.
Related Party Transactions, page 66
8. Please disclose the interest rate and ma turity of the short-term loan from Moon View. 9. Please disclose the use of proceeds for each of the related party loans. 10. Please provide disclosure here about the management fee payable to PEWC and disclose what the management fee is for. 11. In the last paragraph, pleas e state that the financial st atements you are incorporating are in your Form 20-F. In your cross-re ference to footnote 1 7, please reference your copper purchases from PEWC Plan of Distribution, page 69
12. We reference the second paragraph. Please tell us why you would not file a prospectus supplement until a pledgee or donee intends to sell more than 500 shares.
Yuan Chun Tang Asia Pacific Wire & Cable Corporation Limited December 15, 2008 Page 3 Selling Shareholder, page 71
13. We note your response to prior comment 40 and the revised disclosure that SOF may be deemed to be an underwriter. We restate the comment. Please tell us whether SOF is a registered broker. If so, please state that they “are” a nd underwriter. Please tell us whether SOF is an affiliate of a broker-dealer. If so, please also disclose the representations set forth in the letter or state they “are” an underwriter.
Legal Matters, page 189
14. Please clarify which matters Morrison & Foerster and Appleby will pass on. Legal Opinion-Exhibit 5.1
15. Please delete the assumption in (i) since this reflects whether the shares are duly authorized. 16. We reference the next to last paragraph wh ich states that the opinion speaks as of its date. Please note that shareholders must be able to rely upon the opinion up to the time that the F-1 becomes effective. Please either delete this statement or file an executed copy of the opinion dated as of the date of effectiveness.
Form 20-F for the Year Ended December 31, 2007
3.3.6 Disclosure Controls and Procedures and In ternal Controls Over Financial Reporting Classified as Ineffective, page 9 17. We note your response to prior comment 49 which references your risk factor disclosure in your Form F-1/A. Your disclosure in your Form 20-F which is incorporated by reference into you r Form F-1/A does not provide this information. Therefore, as previously requested, please revise to disclose in greater detail the nature of the four material we aknesses identified in your disclosure. In this regard, also revise to disclose the specific steps that the Company implemented at its June 1 3, 2008 Board meeting to remediate the material weaknesses.
Item 5.1 Disclosures of Critical Accounting Policies, page 34
18. We note that your stock price has con tinued to decline from $5.20 at December 31, 2007, to $1.00 at December 5, 2008, and your market capitalization as of June 30, 2008, is significantly less th an total stockholders’ equit y, which is an indicator that your goodwill and/or long-lived assets may be impaired. Tell us whether or not this decline in market cap and stock price has triggered an interim impairment test under SFAS 142 and SFAS 144 and how you determined that your long-lived assets and goodwill are recoverable in the current market environment. Further
Yuan Chun Tang Asia Pacific Wire & Cable Corporation Limited December 15, 2008 Page 4 tell us how the decline in your stock pr ice has impacted your current and future cash flows and what consideration you have given to disclosing this in your Form F-1.
Note 4. Summary of Significant Accounting Policies
Note 18. Defined Contribution a nd Benefit Plans, page F-38
19. We note your response to prior comment 59 where you have identified for us the disclosures required by paragraphs 7 a nd 20 of SFAS 158 in your Form 20-F. Please revise your footnote disclosure, in future filings, to clearly identify these disclosures as you have in your response. Further note that Appendix A, specifically paragraph A6, provides an illu stration of the disc losures required by paragraph 20 of SFAS 158.
Note 20. Segment Financial Information, page F-41
20. We note your response to prior comment 60 and have the following comments: You state that you have a number of operating subsidiaries, you capture certain financial information by produc t line, and the Company’s supervisory personnel act and make decisions on a region al and market basis. It is still not clear to us, how you have identified your operating segm ents and reporting segments. In this regard, tell us if your various operating subsidiaries are considered operating segments and if s o, are they aggregated into your three reportable segments? It is unclear how your CODM evaluate s and assesses performance. Please clarify whether decisions are made on a regi onal and market basis. If so, tell us how you considered this in determining your operating and reportable segments. Supplmentally provide us copies of your CODM reports for December 31, 2007 and June 30, 2008. Explain to us why certain key operational data and certain financial information specific to each product line, in your manufactured product segment, is captured if it is not used internally for decision making on how resources should be allocated.
General:
21. We note throughout your response letter and your Form F-1/A that you have made certain revisions as a result of our comments that you indicate, in some instances, you will also make in your 2008 Form 20-F. Since your Form 20-F is incorporated by reference in your Form F-1/A and includes information that has not been revised as a result of our comme nts, please tell us what consideration has been given to revising your Form 20 -F for the year ended December 31, 2007.
Yuan Chun Tang Asia Pacific Wire & Cable Corporation Limited December 15, 2008 Page 5
Current Economic Risks, page 16
22. Please expand this discussion of recent economic events to clarify the specific impacts and risks to your business. E xplain how the market for your products has been affected and the current and ex pected future impact on your operations, financial position and liquidity. Th is disclosure should provide detailed information on your operations since June 30, your customers, recent order activity, expected trends, management ’s response for managing these events, potential future actions by management and other detailed information. Expand your liquidity discussion to address the e xpected impact to current and future cash flows and how you expect recent economic events, including the credit shortage, may affect other sources of liquidity.
* * * *
As appropriate, please amend your regist ration statement in response to these comments. You may wish to provide us with marked copies of the amendment to expedite our review. Please furnish a cove r letter with your amendment that keys your responses to our comments and provides any requested information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your amendmen t and responses to our comments. You may contact Melissa Ro cha, Staff Accountant, at (202) 551-3692 or Terrence O’Brien, Accounting Branch Chief, at (202) 551-3355 if you have questions regarding comments on the financial statements and rela ted matters. Please contact Jessica Kane, Staff Attorney, at (202) 551-3235 or me at (202) 551-3767 with any other questions.
Sincerely, Jennifer Hardy Branch Chief
cc: Michael J. Hagan, Esq. Morrison & Foerster LLP
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE
Mail Stop 7010 December 15, 2008
Yuan Chun Tang Chief Executive Officer Asia Pacific Wire & Cable Corporation Limited 7/Fl. B, No. 132, Sec. 3 Min-Sheng East Road Taipei, 105, Taiwan People’s Republic of China
Re: Asia Pacific Wire & Cable Corporation Limited
Amendment No. 1 to Form F-1
Filed November 26, 2008
File No. 333-153796
Form 20-F for the year ended December 31, 2007
Filed June 27, 2008 File No. 001-14542
Dear Mr. Tang:
We have reviewed your filings and have the following comments. We welcome
any questions you may have about our comments or any other aspect of our review. Feel
free to call us at the telephone numbers listed at the end of this letter.
Form F-1
General
1. Briefly describe the nature of the cr iminal proceedings against former PEWC
officers and directors and describe the malfeasance that led to the delisting from the Taipei Stock Exchange.
Summary, page 1
2. Please provide an organizational chart in the summary which includes your
joint venture ownerships.
Risk Factors, page 5
3. Please include a risk factor about your default on the PEWC loan.
Yuan Chun Tang
Asia Pacific Wire & Cable Corporation Limited December 15, 2008
Page 2 Certain Historical Information Regarding Own ership and Control of the Company, page
24
4. Please clarify who Set Top International is and briefly describe what the litigation
between them and PEWC related to. 5. Please describe how the Option Agreement came about and disclose its purpose.
6. Please explain carried interest and clarif y whether PEWC is still paying it. Clarify
whether the purchase price was funded w ith debt by Sino JP. Disclose why the
transaction was structured to include carri ed interest and how it is accounted for by
each of the parties. 5.4 - Liquidity and Capital Resources, page 47
7. We note your response to prior comment 32 and your revised disclosure. Your
discussion of the cash flow statement a nd the factors that drive cash flows does
not provide information for the period ending June 30, 2008. Please revise to
provide a balanced discussion of the factor s that drive cash flow s, explanations of
the reason for increases and decreases in your cash flows including the reasons for
the changes in operating assets and liabilities for the most recent period.
Additionally, ensure that your discussi on for the interim period discusses the
significant impact accounts receivable s and inventory had on operating cash
flows. Refer to FRR No. 72-501.13.
Related Party Transactions, page 66
8. Please disclose the interest rate and ma turity of the short-term loan from Moon
View. 9. Please disclose the use of proceeds for each of the related party loans.
10. Please provide disclosure here about the management fee payable to PEWC and disclose what the management fee is for. 11. In the last paragraph, pleas e state that the financial st atements you are incorporating
are in your Form 20-F. In your cross-re ference to footnote 1 7, please reference your
copper purchases from PEWC Plan of Distribution, page 69
12. We reference the second paragraph. Please tell us why you would not file a
prospectus supplement until a pledgee or donee intends to sell more than 500 shares.
Yuan Chun Tang
Asia Pacific Wire & Cable Corporation Limited December 15, 2008
Page 3 Selling Shareholder, page 71
13. We note your response to prior comment 40 and the revised disclosure that SOF may
be deemed to be an underwriter. We restate the comment. Please tell us whether SOF is a registered broker. If so, please state that they “are” a nd underwriter. Please tell
us whether SOF is an affiliate of a broker-dealer. If so, please also disclose the representations set forth in the letter or state they “are” an underwriter.
Legal Matters, page 189
14. Please clarify which matters Morrison & Foerster and Appleby will pass on.
Legal Opinion-Exhibit 5.1
15. Please delete the assumption in (i) since this reflects whether the shares are duly
authorized. 16. We reference the next to last paragraph wh ich states that the opinion speaks as of
its date. Please note that shareholders must be able to rely upon the opinion up to
the time that the F-1 becomes effective. Please either delete this statement or file an executed copy of the opinion dated as of the date of effectiveness.
Form 20-F for the Year Ended December 31, 2007
3.3.6 Disclosure Controls and Procedures and In ternal Controls Over Financial Reporting
Classified as Ineffective, page 9
17. We note your response to prior comment 49 which references your risk factor
disclosure in your Form F-1/A. Your disclosure in your Form 20-F which is incorporated by reference into you r Form F-1/A does not provide this
information. Therefore, as previously requested, please revise to disclose in
greater detail the nature of the four material we aknesses identified in your
disclosure. In this regard, also revise to disclose the specific steps that the
Company implemented at its June 1 3, 2008 Board meeting to remediate the
material weaknesses.
Item 5.1 Disclosures of Critical Accounting Policies, page 34
18. We note that your stock price has con tinued to decline from $5.20 at December
31, 2007, to $1.00 at December 5, 2008, and your market capitalization as of June
30, 2008, is significantly less th an total stockholders’ equit y, which is an indicator
that your goodwill and/or long-lived assets may be impaired. Tell us whether or not this decline in market cap and stock price has triggered an interim impairment
test under SFAS 142 and SFAS 144 and how you determined that your long-lived
assets and goodwill are recoverable in the current market environment. Further
Yuan Chun Tang
Asia Pacific Wire & Cable Corporation Limited December 15, 2008
Page 4 tell us how the decline in your stock pr ice has impacted your current and future
cash flows and what consideration you have given to disclosing this in your Form
F-1.
Note 4. Summary of Significant Accounting Policies
Note 18. Defined Contribution a nd Benefit Plans, page F-38
19. We note your response to prior comment 59 where you have identified for us the
disclosures required by paragraphs 7 a nd 20 of SFAS 158 in your Form 20-F.
Please revise your footnote disclosure, in future filings, to clearly identify these
disclosures as you have in your response. Further note that Appendix A, specifically paragraph A6, provides an illu stration of the disc losures required by
paragraph 20 of SFAS 158.
Note 20. Segment Financial Information, page F-41
20. We note your response to prior comment 60 and have the following comments:
You state that you have a number of operating subsidiaries, you capture
certain financial information by produc t line, and the Company’s supervisory
personnel act and make decisions on a region al and market basis. It is still not
clear to us, how you have identified your operating segm ents and reporting
segments. In this regard, tell us if your various operating subsidiaries are
considered operating segments and if s o, are they aggregated into your three
reportable segments?
It is unclear how your CODM evaluate s and assesses performance. Please
clarify whether decisions are made on a regi onal and market basis. If so, tell
us how you considered this in determining your operating and reportable segments. Supplmentally provide us copies of your CODM reports for
December 31, 2007 and June 30, 2008.
Explain to us why certain key operational data and certain financial information specific to each product line, in your manufactured product
segment, is captured if it is not used internally for decision making on how resources should be allocated.
General:
21. We note throughout your response letter and your Form F-1/A that you have
made certain revisions as a result of our comments that you indicate, in some
instances, you will also make in your 2008 Form 20-F. Since your Form 20-F is
incorporated by reference in your Form F-1/A and includes information that has
not been revised as a result of our comme nts, please tell us what consideration has
been given to revising your Form 20 -F for the year ended December 31, 2007.
Yuan Chun Tang
Asia Pacific Wire & Cable Corporation Limited December 15, 2008 Page 5
Current Economic Risks, page 16
22. Please expand this discussion of recent economic events to clarify the specific
impacts and risks to your business. E xplain how the market for your products has
been affected and the current and ex pected future impact on your operations,
financial position and liquidity. Th is disclosure should provide detailed
information on your operations since June 30, your customers, recent order
activity, expected trends, management ’s response for managing these events,
potential future actions by management and other detailed information. Expand
your liquidity discussion to address the e xpected impact to current and future cash
flows and how you expect recent economic events, including the credit shortage,
may affect other sources of liquidity.
* * * *
As appropriate, please amend your regist ration statement in response to these
comments. You may wish to provide us with marked copies of the amendment to
expedite our review. Please furnish a cove r letter with your amendment that keys your
responses to our comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your amendmen t and responses to our comments.
You may contact Melissa Ro cha, Staff Accountant, at (202) 551-3692 or Terrence
O’Brien, Accounting Branch Chief, at (202) 551-3355 if you have questions regarding
comments on the financial statements and rela ted matters. Please contact Jessica Kane,
Staff Attorney, at (202) 551-3235 or me at (202) 551-3767 with any other questions.
Sincerely, Jennifer Hardy Branch Chief
cc: Michael J. Hagan, Esq. Morrison & Foerster LLP