Company: KG
Filing Date: 2025-03-10
Form Type: S-4
Source: 0001104659-25-021993
Chunk: 171

Company: Kestrel Group Ltd
Filing Date: 2025-03-10
Form: S-4
Chunk 171
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 to such holder, including the consequences if the IRS successfully challenged the qualification of the Kestrel contribution and the first merger, taken together, as a transaction described in Section 351 of the Code or the qualification of the second merger as a transaction described in Section 351 of the Code.

Tax Treatment of Bermuda NewCo Following the Combination

Pursuant to Section 7874(b) of the Code, upon consummation of the second merger and without any action or election by Bermuda NewCo, Bermuda NewCo expects to be treated as a domestic corporation for all U.S. federal tax purposes.

U.S. Federal Income Tax Consequences of the Combination to U.S. Holders of Maiden Shares

Subject to the paragraph below, as a result of each merger qualifying as a transaction described in Section 351 of the Code, the following tax consequences would result:

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a U.S. Holder of Maiden shares will not recognize gain or loss upon the exchange of its Maiden shares for US NewCo interests in the first merger;

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the aggregate basis of the US NewCo interests received in the first merger by a U.S. Holder of Maiden shares will be the same as the aggregate basis of the shares of Maiden shares exchanged;

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the holding period of the US NewCo interests received in the first merger by a U.S. Holder of Maiden shares generally will include the holding period of the shares of Maiden shares for which they are exchanged;

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a U.S. Holder of US NewCo interests will not recognize gain or loss upon the exchange of its US NewCo interests for Bermuda NewCo common shares in the second merger;

•

the aggregate basis of the Bermuda NewCo common shares received in the second merger by a U.S. Holder of US NewCo interests will be the same as the aggregate basis of the US NewCo interests exchanged; and

•

the holding period of the Bermuda NewCo common shares received in the second merger by a U.S. Holder of US NewCo interests generally will include the holding period of the US NewCo interests for which they are exchanged.

Each U.S. Holder who will exchange multiple blocks of Maiden shares in connection with the combination is urged to consult its tax advisors regarding the consequences of the combination on such U.S. Holder’s tax basis and holding period in the Bermuda NewCo common shares received in the second merger.

Passive Foreign Investment Company Rules

Bermuda NewCo is not a foreign corporation subject to the passive foreign investment company (“PFIC