Securities Act of 1933
January 14, 2009
Response of the Office of International Corporate Finance
Division of Corporation Finance
Weatherford International Ltd. (Weatherford-Switzerland and Weatherford-Bermuda)
Incoming letter dated January 14, 2009
Based on the facts presented, the Division’s views are as follows. Capitalized terms have the same meanings defined in your letter.
- The Division will not recommend enforcement action to the Commission if Weatherford-Switzerland, in reliance on your opinion of counsel that the exemption under Section 3(a)(10) of the Securities Act of 1933 is available, issues Weatherford-Switzerland Registered Shares to holders of Weatherford-Bermuda Common Shares pursuant to the Scheme of Arrangement without registration under the Securities Act. In reaching this position, we have noted that:
- the Bermuda Court will conduct a hearing on the fairness of the Scheme of Arrangement to the holders of Weatherford-Bermuda Common Shares;
- the Bermuda Court will approve the fairness of the terms and conditions of the Scheme of Arrangement to the holders of Weatherford-Bermuda Common Shares before Weatherford-Switzerland issues Weatherford-Switzerland Registered Shares pursuant to the Scheme of Arrangement;
- all prospective recipients of Weatherford-Switzerland Registered Shares under the Scheme of Arrangement will receive notice of the hearing regarding the Scheme of Arrangement and will have the opportunity to be heard at the hearing; and
- Weatherford-Bermuda and Weatherford-Switzerland will advise the Bermuda Court before the hearing that, if the Bermuda Court approves the terms and conditions of the Scheme of Arrangement, its sanctioning of the Scheme of Arrangement will constitute the basis for the issuance of the Weatherford-Switzerland Registered Shares under the Scheme of Arrangement without registration under the Securities Act, in reliance on the exemption from registration provided by Securities Act Section 3(a)(10).
- The reporting history of Weatherford-Bermuda under the Exchange Act may be taken into account to determine whether Weatherford-Switzerland is eligible to use Form S-3 or Form S-8 under the Securities Act, and to determine whether Weatherford-Switzerland may furnish information in a Form S-4 under the Securities Act in the manner permitted for a company that is eligible to use Form S-3, as contemplated by General Instruction B.1.a. of Form S-4.
- Without necessarily agreeing with your analysis, the Division will not object if Weatherford-Switzerland, as successor to Weatherford-Bermuda, does not file new registration statements under the Securities Act for ongoing offerings of securities covered by Weatherford-Bermuda’s currently effective registration statements on Forms S-3 and S-8. Instead, Weatherford-Switzerland may adopt Weatherford-Bermuda’s registration statements pursuant to Rule 414 under the Securities Act by filing post-effective amendments to those registration statements.
- Weatherford-Bermuda’s Exchange Act reporting history may be taken into account when determining Weatherford-Switzerland’s compliance with the current public information requirements of Rule 144(c)(1) under the Securities Act.
- Average weekly reported trading volume in Weatherford-Bermuda’s Common Shares during the time periods specified by Rule 144(e)(1) may be taken into account in determining the limitations on the amount of securities that may be sold pursuant to Rule 144(e).
- The Redomestication will be a “succession” for purposes of Rule 12g-3(a) under the Exchange Act, and Weatherford-Switzerland will be a “large accelerated filer” for purposes of Rule 12b-2 under the Exchange Act.
- Persons who have filed statements on Schedule 13D or 13G under the Exchange Act reporting beneficial ownership of Weatherford-Bermuda’s Common Shares will not be required to file additional or amended statements on Schedule 13D or 13G as a result of the Redomestication, provided that they note in their next subsequent filings on Schedule 13D or 13G that Weatherford-Switzerland is the successor to Weatherford-Bermuda.
- Actions to be taken by Weatherford-Switzerland to assume the obligations of Weatherford-Bermuda under the Stock-Based Benefit Plans do not constitute actions that require the disclosure of information under Item 10 of Schedule 14A.
- The Division will not recommend enforcement action to the Commission, based on the facts presented, if:
In arriving at these positions, we have noted in particular your representation that Weatherford-Switzerland will deliver to each trustee an opinion of counsel that the existing Indentures governing the Weatherford Debt Securities authorize the trustees to enter into supplemental indentures without the vote or consent of the holders of the Weatherford Debt Securities for the purposes of evidencing Weatherford-Switzerland’s assumption of Weatherford-Bermuda’s obligations under the Indentures.
- Weatherford-Switzerland does not register under the Securities Act its assumption of Weatherford-Bermuda’s obligations under the Indentures governing the Weatherford Debt Securities; and
- Weatherford-Switzerland does not qualify supplemental indentures under the Trust Indenture Act in connection with its assumption of such obligations.
These positions are based upon the representations made in your letter to the Division. Any different facts or conditions might require a different conclusion. Moreover, the responses regarding registration under the Securities Act and qualification under the Trust Indenture Act express the Division's position on enforcement action only and do not purport to express a legal position on the questions presented.
Elliot B. Staffin
The Incoming Letter is in Acrobat format.