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United States securities and exchange commission logo
April 27, 2022
Yongchen Lu
Chief Executive Officer
TH International Limited
2501 Central Plaza
227 Huangpi North Road
Shanghai, People s Republic of China, 200003
Re: TH International
Limited
Amendment No. 3 to
Registration Statement on Form F-4
Filed March 28,
2022
File No. 333-259743
Dear Mr. Lu:
We have reviewed your amended 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 amending your registration
statement and providing the
requested information. 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 any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our
February 18, 2022 letter.
Amendment No. 3 to Registration Statement on Form F-4 filed March 28,
2022
Cover Page
1. We note your response
to comment 1, as well as your amended disclosure. Please also
include a
cross-reference to the risk factor that discusses the inspection time frames
under the HFCAA and
AHFCAA.
2. We note your amended
disclosure that THIL expects to "distribute cash dividends after it
becomes profitable."
Please revise your disclosure to ensure consistency with your
disclosure on page 57,
in which you state that you "do not intend to pay dividends for the
foreseeable future."
Yongchen Lu
FirstName LastNameYongchen Lu
TH International Limited
Comapany
April NameTH International Limited
27, 2022
April 227, 2022 Page 2
Page
FirstName LastName
3. We note your response to comment 3, as well as your amended
disclosure. Additionally,
please amend your disclosure here and in the summary risk factors and
risk factors
sections to state that, to the extent cash and/or assets in the
business is in the PRC and/or
Hong Kong or your PRC and/or Hong Kong entities, including TH Hong
Kong
International Limited, Tim Hortons (China) Holdings Co., Tim Hortons
(Shanghai) Food
and Beverage Co., Ltd., such funds and/or assets may not be available
to fund operations
or for other use outside of the PRC and/or Hong Kong due to
interventions in or the
imposition of restrictions and limitations on the ability of you or
your subsidiaries by the
PRC government to transfer cash and/or assets. On the cover page,
provide cross-
references to these other discussions. Last, explain what you mean by
"due dates" in your
discussion of your intent to settle amounts owed, and include a
discussion of such "due
dates" in the summary section.
4. We also note your amended disclosure that "THIL and its PRC
subsidiaries are subject to
various restrictions on intercompany fund transfers and foreign
exchange control."
Briefly describe these restrictions on the cover page, and provide a
cross-reference to your
discussion of this issue in your summary, summary risk factors, and
risk factors sections,
as well. If you have any other cash management policies that dictate
how funds are
transferred between you and your subsidiaries (e.g., contractual
policies), summarize the
policies on your cover page and in the prospectus summary, and include
a cross-reference
on the cover page to the discussion in the prospectus summary.
Questions and Answers about the Business Combination and the Extraordinary
General Meeting,
page viii
5. Please include a question and answer that explains why the parties
amended the merger
agreement to reduce the valuation of THIL from $1,688,000,000 to
$1,400,000,000.
Please explain how such agreement affects the various shareholder
contingency groups.
Please include a discussion of such reduction and the related
interests and reasons in the
section entitled "Background of the Business Combination."
Q: What happens if a substantial number of public shareholders vote in favor of
the Business
Combination Proposal . . . ?, page xiii
6. We note your response to comment 4, as well as your amended
disclosure. We note that
the amended ownership percentages of the sponsor and existing Silver
Crest and THIL
shareholders no longer add up to 100% prior to accounting for
dilution. Please explain
why or revise the chart accordingly to ensure that a complete picture
of the company pre-
dilution is disclosed to investors. Additionally, we note that the
500,000 shares to be
issued through a PIPE to an affiliate of the sponsor is reflected in
the line item "PIPE
Investors" instead of the line item "The Sponsor," according to your
disclosures in
footnotes (10) and (12). Please revise to attribute such shares to the
sponsor in order to
provide shareholders with a balanced picture of the sponsor's
ownership following the
business combination, or tell us why you do not think this is
necessary.
Yongchen Lu
TH International Limited
April 27, 2022
Page 3
Summary
Shareholder loans and capital contributions., page 5
7. In your discussion of how cash is transferred through your
organization, please provide
cross-references to the condensed consolidating schedule and the
consolidated financial
statements.
Regulatory Matters, page 20
8. We note your response to comment 6, as well as your disclosure that
"THIL believes that
it will not be subject to cybersecurity review or reporting
requirements under the
applicable PRC cybersecurity laws and regulations because it does not
qualify as a critical
information infrastructure operator and has not conducted any data
processing activities
that affect or may affect national security or hold personal
information of more than one
million users following the transfer of control and possession of TH
China Data to
DataCo." Please update the disclosure, and local counsel's opinion to
the extent
necessary, to reflect that such data has been transferred to DataCo.
Additionally, please
ensure your disclosure throughout the proxy statement/prospectus
reflects that such
transfer has occurred. In this regard, we note your disclosure that
you "expect to rely
significantly on DataCo" and that you "will pay a service fee to
DataCo" (emphasis
added).
9. We note your response to comment 8, as well as your amended disclosure
that "If THIL
fails to receive or maintain any requisite permission or approval from
the CSRC or other
PRC regulatory authorities for the Business Combination or future
offerings, or the waiver
for such permission or approval, in a timely manner, or at all . . .
.." Please revise to
expand this discussion of the consequences to apply to all permissions
or approvals from
the CSRC, CAC or other PRC regulatory authorities for engaging in the
Business
Combination, offering your securities, and conducting your operations.
Risk Factors
"The approval and/or other requirements . . . ", page 46
10. We note your response to comment 12, as well as your amended disclosure
that "the
Business Combination is not subject to filing requirement under the CSRC
Draft Rules
(if enacted), because [you] initially filed the registration
statement/proxy statement in
connection with the Business Combination on September 23, 2021 and the
Q&A
explicitly states that the CSRC Draft Rules would not be applied
retrospectively." Please
revise your disclosure to provide a further analysis explaining why you
would not be
FirstName LastNameYongchen Lu
subject to the CSRC based on your initial filing date and the Q&A. In
this regard, we note
Comapany NameTH
that THIL's International
listing Limited
has not yet occurred despite the initial filing
date and therefore it does
not2022
April 27, appear to be
Page 3 retrospective in nature.
FirstName LastName
Yongchen Lu
FirstName LastNameYongchen Lu
TH International Limited
Comapany
April NameTH International Limited
27, 2022
April 427, 2022 Page 4
Page
FirstName LastName
Background of the Business Combination, page 90
11. We note your response to comment 17. Please revise your disclosure to
clarify whether
any of the PIPE Investments involve new investors with no preexisting
relationships that
thereby would generate a fee for UBS and/or BofA, or alternatively
state that all of the
current PIPE Investors have preexisting relationships.
12. Please explain why THIL requested "Silver Crest's consent to increase
the amount of such
[permitted] financing from $30 million to $50 million." In connection
therewith, please
discuss THIL's issuance of convertible notes on December 9, 2021, the
same date
that Silver Crest provided its consent to THIL regarding such
permitted financing.
13. We note your amended disclosure that the parties amended the merger
agreement to
remove the minimum cash closing condition. Please explain why such
condition was
removed, including which party initially proposed such removal and the
related reasons or
concerns for removing such condition. In revising your disclosure,
please address how the
interests of the parties evolved from the initial negotiation that
accounted for "the
expected cash needs of THIL in connection with its long-term growth
plans." Please also
address the extent to which the parties considered redemptions in
negotiating such
removal.
14. We note your amended disclosure that the sponsor "agreed to contribute
to the capital of
Silver Crest for no consideration 4,312,500 Class B ordinary shares of
Silver Crest and
4,450,000 warrants to purchase Class A ordinary shares of Silver
Crest." We also note
that the sponsor currently owns 8,625,000 Silver Crest Class B Shares
and 8,900,000
private warrants in Silver Crest. Please revise your disclosure to
state that the sponsor has
agreed to contribute half of its equity upon closing of the business
combination, if true,
and explain why the sponsor has agreed to forfeit such equity stake in
the combined
company. Please discuss any negotiations between the sponsor, THIL and
other interested
parties, and include a discussion of such parties' interests, the
initial contribution amounts
proposed, the decision to no longer provide warrants to a charitable
foundation and the
sponsor's decision to invest additional capital in THIL through its
proposed PIPE
investment of $5,000,000 while also forfeiting certain of its sponsor
shares and private
placement warrants.
15. We note your amended disclosure regarding the negotiation of "an
additional $50,000,000
in pre-merger equity financing." Please revise your disclosure to
clarify that this
additional equity financing was in addition to the $50,000,000 of
permitted financing that
Silver Crest consented to on December 9, 2021 and to clarify whether
such "additional
$50,000,000 in pre-merger equity financing" therefore still remains
available. In this
regard, it appears that Silver Crest separately consented to the $50
million equity support
agreement with Shaolin Capital prior to the amendment that includes
such additional
permitted financing.
Yongchen Lu
FirstName LastNameYongchen Lu
TH International Limited
Comapany
April NameTH International Limited
27, 2022
April 527, 2022 Page 5
Page
FirstName LastName
16. Please provide additional discussion of the negotiation of the equity
support agreement
with Shaolin and the committed equity facility with Shaolin, including
a brief description
of the "issues that remained outstanding," the dates on which the
agreements were
executed, and the discounts and/or premiums that THIL offered to each
of such
institutional investors. Please also disclose that such subscription
amount may not exceed
the sum of shares purchased in the PIPE investment and 50% of the
public shares that
have not been redeemed, and explain why.
17. Please further discuss the negotiation of the PIPE Subscription
Agreements on March 9,
2022, including why THIL agreed to issue an additional 600,000 shares
to each PIPE
Investor who pays at least $10,000,000. In this regard, we note that
Peter Yu, Tim
Hortons Restaurants International GmbH and TenCent Holdings Limited
appear to be
receiving such consideration according to your disclosure on pages
232-3.
PIPE Subscription Agreement, page 196
18. Please revise to include a discussion of Tencent Mobility Limited's
agreement to purchase
shares per the PIPE Subscription Agreement.
Taxation
Certain Material U.S. Federal Income Tax Considerations, page 198
19. We note your response to comment 16. Please delete as inappropriate
the phrase
"customary assumptions, qualifications and limitations" in the first
paragraph of this
section. Revise the subheading "Certain Material U.S. Federal Income
Tax
Considerations" and all references thereto to remove the word
"certain." Refer to Section
III.C.1 of Staff Legal Bulletin No. 19.
General
20. To the extent that you have one or more directors, officers or members
of senior
management located in the PRC/Hong Kong, please (i) state that is the
case and identify
the relevant individuals in your section entitled "Management
Following the Business
Combination," and (ii) include a separate "Enforceability" section,
consistent with Item
101(g) of Regulation S-K, and a risk factor addressing the challenges
of bringing actions
and enforcing judgments/liabilities against such individuals.
Yongchen Lu
FirstName LastNameYongchen Lu
TH International Limited
Comapany
April NameTH International Limited
27, 2022
April 627, 2022 Page 6
Page
FirstName LastName
You may contact Tatanisha Meadows at 202-551-3322 or Adam Phippen at
202-551-
3336 if you have questions regarding comments on the financial statements and
related
matters. Please contact Brian Fetterolf at 202-551-6613 or Lilyanna Peyser at
202-551-3222
with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services
cc: John Owen