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United States securities and exchange commission logo
June 29, 2020
John McGrath
Chief Executive Officer
Reynolds Group Holdings Ltd
1900 W. Field Court
Lake Forest, Illinois 60045
Re: Reynolds Group
Holdings Ltd
Draft Registration
Statement on Form S-1
Submitted on June
2, 2020
CIK No. 0001527508
Dear Mr. McGrath:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Non-GAAP Financial Measures, page 27
1. We note you use the
terms Adjusted EBITDA and Adjusted EBITDA from continuing
operations
interchangeably in narrative and tabular presentations throughout the filing.
Please consistently
label this non-GAAP financial measure throughout the filing.
Use of Proceeds, page 54
2. You disclose that the
offering proceeds will be used to repay debt. Please set forth the
interest rate and
maturity of the indebtedness. Also, if the debt was incurred within the
past year, describe the
use of the proceeds of the indebtedness other than short-
John McGrath
FirstName LastNameJohn
Reynolds Group Holdings McGrath
Ltd
Comapany
June NameReynolds Group Holdings Ltd
29, 2020
June 29,
Page 2 2020 Page 2
FirstName LastName
term borrowing used for working capital. Refer to Instruction 4 of
Item 504 of Regulation
S-K.
Capitalization, page 56
3. When you complete the pro forma columns, please clearly show how you
determined each
pro forma amount in the notes to the capitalization table. You should
also disclose any
significant estimates and/or assumptions used to determine each
amount.
Unaudited Pro Forma Consolidated Financial Data, page 64
4. Please revise the disclosures to the pro forma financial statements to
explain the reasons
for the timing of the RCP and GPC Separations. Please specifically
address why the RCP
Separation occurred in February 2020, which results in RCP being
reflected in
discontinued operations in the historical financial statements, and
why the GPC
Separation will not occur until just prior to IPO, which results in
GPC being reflected in
continuing operations in the historical financial statements.
5. Although we are unable to review the pro forma financial statements
until they have been
completed, it appears the pro forma balance sheet on page 66 should
present a subtotal
column subsequent to the GPC Separation. Please explain or revise your
current
presentation accordingly.
Management's Discussion and Analysis of Results of Operations and Financial
Condition
Historical Cash Flows, page 92
6. We note you disclose the impact of discontinued operations on
historical cash flows. Due
to the intended separation of GPC, it appears you should also address
the impact of GPC
on historical cash flows and more fully disclose and discuss the
expected impact on future
cash flows and results that are likely to occur as a result of the GPC
Separation and related
transactions.
Critical Accounting Policy Estimates and Assumptions, page 98
7. We note changes in your tax valuation allowance during the year ended
December 31,
2019 were due to changes in expected future taxable income as a result
of the distribution
of Reynolds Consumer Products on February 4, 2020. Please revise your
disclosures to
more fully address the expected impact on your taxable income and
disclose and discuss
the material estimates and assumptions underlying the change in your
tax valuation
allowance.
Executive Compensation, page 134
8. Please file the employment and cash retention agreements as exhibits
to your registration
statement.
John McGrath
Reynolds Group Holdings Ltd
June 29, 2020
Page 3
9. We note that there are a number of blanks in this section. Please
provide missing
information in your next amendment.
Registration Rights, page 168
10. Please clarify whether there are any maximum cash penalties under PFL
s rights
agreement. Please also disclose any additional penalties that could
resulting from delays in
registering your common stock. Refer to ASC 825-20-50-1.
Consolidated Financial Statements
Note 4 - Impairment, Restructuring and Other Related Charges, page F-20
11. In regard to each asset impairment you recorded, please disclose the
remaining carrying
value of the assets that were impaired.
Note 18 - Related Party Transactions, page F-52
12. We note that within the consolidated financial statements, you
recognized revenue in
continuing operations of $280 million, $316 million and $302 million
for the years end
December 31, 2019, 2018 and 2017 for sales to Reynolds Consumer
Products and
recognized cost of sales in continuing operations for purchases from
Reynolds Consumer
Products of $149 million, $161 million and $148 million. Please revise
note 18 to include
these related party transactions or explain why you do not believe
that disclosure of these
transactions in the the related party footnote is required.
You may contact SiSi Cheng, Staff Accountant at (202) 551-5004 or Anne
McConnell,
Staff Accountant at (202) 551-3709 if you have questions regarding comments on
the financial
statements and related matters. Please contact Sherry Haywood, Staff Attorney
at (202) 551-
3345 or Asia Timmons-Pierce, Special Counsel at (202) 551-3754 with any other
questions.
FirstName LastNameJohn McGrath Sincerely,
Comapany NameReynolds Group Holdings Ltd
Division of
Corporation Finance
June 29, 2020 Page 3 Office of
Manufacturing
FirstName LastName