Company: KG
Filing Date: 2025-03-24
Form Type: S-4/A
Source: 0001104659-25-027242
Chunk: 172

Company: Kestrel Group Ltd
Filing Date: 2025-03-24
Form: S-4/A
Chunk 172
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 a fractional Bermuda NewCo common share by the U.S. Holder in the exchange; and

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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”) rules. However, if Maiden is classified as a PFIC for the taxable year that includes the combination or for a prior taxable year, dispositions of Maiden shares may be subject to the PFIC rules, as described below.

Definition of a PFIC

Under the Code, a foreign (i.e., non-U.S.) corporation is classified as a PFIC for any taxable year in which, after the application of certain “look-through” rules with respect to subsidiaries, (1) 75% or more of its gross income constitutes passive income or (2) 50% or more of its assets produce, or are held for the production of, passive income. For these purposes, passive income includes interest, dividends and other investment income, with certain exceptions.

While Maiden cannot express a definitive view about its PFIC status for the current taxable year or any prior taxable year, based on the composition of its income and valuation of its assets, the manner in which it conducts its business, relevant market data and its current expectations regarding the value and nature of its assets and the sources and nature of its income, Maiden does not expect that it will be a PFIC for the taxable year that includes the combination, and does not believe that it has been a PFIC in any prior taxable year. However, this is a fact-intensive inquiry made on an annual basis and no assurances can be provided regarding Maiden’s PFIC status for any taxable year. The U.S. Internal Revenue Service or courts may not agree with the methodology of Maiden’s PFIC determination, and Maiden’s status as a PFIC during the taxable year that includes the combination cannot be determined until the end of such taxable year. If Maiden is or was characterized as a PFIC for any taxable year during which a U.S. Holder holds or held Maiden shares