Company: KG
Filing Date: 2025-03-10
Form Type: S-4
Source: 0001104659-25-021993
Chunk: 173

Company: Kestrel Group Ltd
Filing Date: 2025-03-10
Form: S-4
Chunk 173
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 in 1992 (the “Proposed PFIC Regulations”), but these

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regulations remain proposed. The IRS could finalize the Proposed PFIC Regulations, including with effect retroactive to a period that includes the combination, or the IRS could take the position that Section 1291(f) of the Code is effective even in the absence of finalized Treasury Regulations. Accordingly, no assurances can be provided as to the potential applicability of Section 1291(f) of the Code to the combination.

Even if Section 1291(f) of the Code and the Proposed PFIC Regulations apply to the combination, however, the Proposed PFIC Regulations provide an exception to the general gain recognition rule for direct or indirect dispositions of PFIC stock if such stock is owned by a U.S. person immediately after the transfer and certain other requirements are met. It is expected that the conditions set forth in the Proposed PFIC Regulations will be met with respect to the exchange of Maiden shares and receipt of Bermuda NewCo common shares by U.S. Holders pursuant to the combination, and accordingly, it is expected that no gain would be recognized by U.S. Holders in the combinations pursuant to Section 1291(f) even if the Proposed PFIC Regulations were to be finalized in their current form with an effective date that includes the date of the combination. If it is ultimately determined that Maiden is a PFIC for the taxable year that includes the combination, Maiden shall endeavor to provide U.S. Holders with all reporting information required to qualify for the exception described above.

#### Reporting Requirement
U.S. Holders of Maiden shares that receive US NewCo interests and, upon consummation of the combination, own Bermuda NewCo common shares representing at least 5% of the total combined voting power or value of the total issued and outstanding Bermuda NewCo common shares, are required to attach to their tax returns for the year in which the combination is consummated, and maintain a permanent record of, a statement containing the information listed in Treasury Regulations section 1.351-3. The facts to be disclosed by a U.S. Holder include the aggregate fair market value of, and the U.S. Holder’s basis in, the Maiden shares and US NewCo interests, as applicable, exchanged pursuant to the mergers.

U.S. Federal Income Tax Consequences to Non-U.S. Holders of the Ownership and Disposition of Bermuda NewCo Common Shares

Sale, Exchange or Other Dis