[Federal Register Volume 65, Number 61 (Wednesday, March 29, 2000)]
[Notices]
[Pages 16675-16676]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7726]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 24364; International Series Release 
No. 1218; 812-12036]


Cirsa Business Corporation, S.A.; Notice of Application

March 23, 2000.
AGENCY: Securities and Exchange Commission (``SEC'').

ACTION: Notice of application for exemption under section 6(c) of the 
Investment Company Act of 1940 (the ``Act'') from all provisions of the 
Act.

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SUMMARY OF APPLICATION: Applicant requests an order under section 6(c) 
of the Act exempting a special purpose vehicle and any special purpose 
vehicle that applicant establishes in the future in the same manner and 
for the same purpose (each, ``SPV'') from all provisions of the Act. 
The order would permit SPV to sell certain debt securities (``Notes'') 
and use the proceeds to finance the business activities of applicant 
and its operating subsidiaries (``Operating Subsidiaries'').

FILING DATE: The application was filed on March 17, 2000.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the SEC orders a hearing. Interested persons may 
request a hearing by writing to the SEC's Secretary and serving 
applicant with a copy of the request, personally or by mail. Hearing 
requests should be received by the SEC by 5:30 p.m. on April 17, 2000 
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 SEC's 
Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, NW, Washington, DC 20549-
0609. Applicant, Carretera Castellar, 298, 08226 Terrassa, Barcelona, 
Spain.

FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Staff Attorney, at 
(202) 942-0634, or Nadya B. Roytblat, Assistant Director, at (202) 942-
0564 (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 for a fee at the 
SEC's Public Reference Branch, 450 Fifth Street, NW, Washington, DC 
20549-0102 (tel. 202-942-8090).

Applicant's Representations

    1. Applicant, a limited liability corporation organized under the 
laws of the Kingdom of Spain, is a Spanish leisure and gaming company. 
Applicant conducts its business activities through the Operating 
Subsidiaries. The Operating Subsidiaries are limited liability 
companies organized under the laws of the Kingdom of Spain that 
manufacture, distribute and operate gaming machines and own and operate 
bingo halls, casinos and family entertainment centers.
    2. SPV will be a public limited company formed under the laws of 
England and Wales. SPV will be organized specifically to raise funds 
for the operations of applicant and the Operating Subsidiaries by 
issuing the Notes and lending the proceeds to applicant and the 
Operating Subsidiaries for the development of their respective 
businesses and repayment of certain existing debts. SPV will be 
organized, and conduct its activities, in accordance with rule 3a-5 
under the Act, with certain exceptions discussed below. Rule 3a-5 
provides an exemption from the definition of investment company for 
certain companies organized primarily to finance the business 
operations of their parent companies or companies controlled by their 
parent companies.
    3. Applicant has determined to raise capital through SPV because 
the direct issuance of the Notes by applicant would not be feasible 
under Spanish corporate law. Spanish corporate law restricts the direct 
issuance of the Notes by applicant or a finance subsidiary of 
applicant. For this reason, at least 95% of equity securities of SPV 
will be held by an English private limited company (``HoldCo SPV''). 
All of HoldCo SPV's equity securities will be held by a professional 
trust corporation (``TrustCo'') under the terms of an English law 
charitable trust. Applicant anticipates that TrustCo will also hold the 
remaining interest in SPV (less than five percent) under the terms of 
the charitable trust. The declaration of trust establishing the 
charitable trust will give TrustCo discretion to apply any residual 
value held by it for such purposes as it may select, provided they 
constitute ``charitable purposes'' under English law. In any case, any 
charity selected to benefit from any residual value in HoldCo SPV's 
assets (including the shares it owns in SPV) will not pay any 
consideration in connection with such acquisition.
    4. SPV intends to issue the Notes in reliance on Regulation S and 
Rule 144A under the Securities Act of 1933 (``1933 Act'') and shortly 
thereafter file as registration statement under the 1933 Act to 
register a separate series of high-yield debt securities with identical 
terms to the initial Notes to be offered in exchange for the initial 
Notes. These Notes will be unconditionally guaranteed by applicant and, 
if the terms and conditions of the Notes so require, jointly and 
severally by one or more of the Operating Subsidiaries on an unsecured 
basis.
    5. Applicant and SPV, in connection with the offering of the Notes, 
will submit to the jurisdiction of any state or federal court in the 
Borough of Manhattan in the City of New York, and will appoint an agent 
to accept any process which may be served, in any suit, action, or 
proceedings brought against applicant or SPV based upon their 
obligation under the Notes as described in the application. The consent 
to jurisdiction and appointment of an authorized agent to accept 
service of process will be irrevocable until all amounts due and to 
become due with respect to the Notes have been paid.

[[Page 16676]]

    6. SPV will loan at least 85% of any cash or cash equivalents 
raised by SPV to applicant and the Operating Subsidiaries as soon as 
practicable, but in no event later than six months after SPV's receipt 
of the cash or cash equivalents. In the event SPV borrows amounts in 
excess of the amounts to be loaned to applicant and the Operating 
Subsidiaries at any given time, SPV will invest the excess in temporary 
investments pending lending the money to applicant and the Operating 
Subsidiaries. Consistent with rule 3a-5, all investments by SPV, 
including all temporary investments, will be made in government 
securities, securities of applicant or a company controlled by 
applicant, or debt securities which are exempted from the provisions of 
the 1933 Act by section 3(a)(3) of the 1933 Act.
    7. SPV's articles of association and its memorandum of association 
and any trust indenture agreement will: (i) Limit its activities to 
issuing the Notes or other debt securities and loaning the proceeds to 
applicant and the Operating Subsidiaries; and (ii) prohibit the 
transfer of SPV's shares to any party other than HoldCo SPV or TrustCo.
    8. HoldCo SPV's articles of association and its memorandum of 
association will: (i) Limit its activities to borrowing funds from 
applicant to purchase and hold shares of SPV; (ii) prohibit the 
transfer of HoldCo SPV's shares to any party other than TrustCo; (iii) 
prohibit the transfer of SPV's shares to any party other than TrustCo; 
and (iv) prohibit HoldCo SPV from issuing any securities (other than 
the initial issuance of its share capital to TrustCo) or otherwise 
incurring any indebtedness other than the loan from applicant 
sufficient to cover the costs of purchasing the shares of SPV and costs 
incidental to the maintenance of HoldCo SPV and SPV.

Applicant's Legal Analysis

    1. Applicant states that SPV may be viewed as falling technically 
within the definition of an investment company under section 3(a)(1) of 
the Act. Applicant requests an exemption under section 6(c) of the Act 
exempting SPV from all provisions of the Act. Section 6(c) of the Act 
permits the SEC to grant an exemption from the provisions of the Act 
if, and to the extent, that such exemption is necessary and appropriate 
in the public interest, consistent with the protection of investors, 
and consistent with the purposes fairly intended by the policy and 
provisions of the Act.
    2. Applicant states that rule 3a-5 under the Act provides an 
exemption from the definition of investment company for certain 
companies organized primarily to finance the business operations of 
their parent companies or companies controlled by their parent 
companies. Applicant states that SPV meets all of the requirements of 
rule 3a-5 except for one, which it cannot meet for Spanish corporate 
law reasons. Rule 3a-5(b)(1)(i) under the Act requires that all of 
SPV's common stock be owned by applicant or a company controlled by 
applicant. Applicant asserts that, while for Spanish corporate law 
reasons SPV's common stock will be held by HoldCo SPV, SPV will be 
organized to serve solely as a conduit for applicant's and the 
Operating Subsidiaries' capital raising activities. Applicant further 
states that SPV`s functions will be limited by its constitutional 
documents and any trust indenture agreement to the activities of a 
traditional finance subsidiary.

Applicant's Conditions

    Applicant agrees that any order granting the requested relief will 
be subject to the following conditions:
    1. SPV will comply with all provisions of rule 3a-5 under the Act, 
except with respect to rule 3a-5(b)(1)(i), over 95% of SPV's common 
shares will be held by HoldCo SPV (all of whose shares will in turn be 
held under the terms of an English law charitable trust), with the rest 
held by TrustCo. For purposes of rule 3a-5 under the Act, applicant 
will be deemed to be SPV's ``parent company'' and each Operating 
Subsidiary will be deemed to be a ``company controlled by the parent 
company.''
    2. SPV's articles of association and memorandum of association and 
any trust indenture agreement will: (i) Limit the SPV's activities to 
issuing the Notes or other debt securities and loaning the proceeds to 
applicant and the Operating Subsidiaries (as well as other activities 
incidental to the issuance of the Notes, loaning the proceeds thereof, 
and the day-to-day operations of the SPV); and (ii) prohibit the 
transfer of SPV's shares to any party other than HoldCo SPV or TrustCo.
    3. HoldCo SPV's articles of association and its memorandum of 
association will: (i) Limit HoldCo SPV's activities to borrowing funds 
from applicant to purchase and hold shares of SPV; (ii) prohibit the 
transfer of HoldCo SPV's shares to any party other than TrustCo 
(pursuant to the terms of the charitable trust); (iii) prohibit 
transfer of SPV's shares to any party other than TrustCo; and (iv) 
prohibit HoldCo SPV from issuing any securities (other than the initial 
issuance of its share capital to TrustCo) or otherwise incurring any 
indetedness, other than a loan from applicant sufficient to cover the 
costs of purchasing the shares of SPV and costs and incidental to the 
maintenance of HoldCo SPV and SPV.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-7726 Filed 3-28-00; 8:45 am]
BILLING CODE 8010-01-M