IDT Corporation (NYSE: IDT) today announced that the Securities and Exchange Commission has declared effective the Registration Statement on Form 10 for the spin-off of its Straight Path Communications Inc. (SPCI) subsidiary to IDT stockholders. SPCI has extensive holdings of FCC wireless spectrum licenses and a portfolio of patents primarily related to communications over computer networks. Straight Path Spectrum leases its extensive holdings of 38 and 28 GHz fixed wireless spectrum licenses. The licenses, which cover virtually the entire United States and include substantial volumes of bandwidth in all major metropolitan areas, were purchased by IDT from the bankruptcy estate of Winstar Communications. Straight Path IP Group holds, enforces and licenses patent rights pertaining to communications over computer networks, such as the Internet. SPCI will be spun off with a management team dedicated to realizing value from these intangible assets, and will be capitalized with approximately $15 million in cash. A copy of the amended Form 10 Information Statement is available on the IDT website at www.idt.net/about/ir. In connection with the spin-off, and subject to the approval of SPCI Class B common stock for listing on the NYSE MKT LLC:
- The spin-off will be effective at 11:59 p.m. EDT on the distribution date, on our about July 31st, 2013.
- On the distribution date, each IDT stockholder as of 5:00 PM EDT on the record date, July 25th, 2013, will receive one share of SPCI Class A common stock for every two shares of IDT Class A common stock and one share of SPCI Class B common stock for every two shares of IDT Class B common stock.
- Beginning on July 23rd, 2013, the entitlement to shares of SPCI Class B common stock will trade on the NYSE MKT “when issued” market with the ticker symbol STRP WI. On the first day of trading following the distribution date, “when issued” trading will cease, and “regular-way” trading of SPCI Class B common stock will begin on the NYSE MKT with the ticker symbol “STRP”.
- Also beginning on July 23rd, 2013 and continuing through the distribution date, there will be two NYSE markets in IDT Class B common stock: a “regular-way” market and an “ex-distribution” market. Shares of IDT Class B common stock exchanged in the “regular-way” market will trade with an entitlement to receive shares of SPCI Class B common stock through the distribution. Shares of IDT Class B common stock exchanged in the “ex-distribution” market will trade without such an entitlement.
- IDT has received a legal opinion from Pryor Cashman LLP that the distribution should qualify as tax-free transaction for U.S. federal income tax purposes. However, cash distributed in lieu of fractional shares generally will be taxable to the recipient stockholders. Stockholders are urged to consult their financial advisors and tax advisors regarding the particular consequences of the distribution in their situation, including, without limitation, the specific implications of selling IDT common stock on or prior to the Distribution Date and the applicability and effect of any U.S. federal, state, local and foreign tax laws.
- SPCI Class B common stock has been assigned CUSIP # 862578101
About IDT Corporation:IDT Corporation (NYSE: IDT) through its IDT Telecom division, provides telecommunications and payment services. IDT Telecom’s retail products allow people to communicate and share resources around the world while its carrier services business is a global leader in wholesale voice termination. For more information, visit www.idt.net. IDT has spawned several other successful companies including Net2Phone (formerly NTOP on NASDAQ), for which AT&T invested $1.4 billion for a 32% share in 2000, IDT Entertainment, which was sold to Liberty Global (NASDAQ: LBTYA) in 2006 for $186 million and became known as Starz Distribution (the motion picture, animation, television and home video operating unit of Starz (NASDAQ: STRZA, STRZB)), and Genie Energy (NYSE: GNE), which was spun off to IDT stockholders in 2011 and currently has a market cap of over $220 million.