Company: KG
Filing Date: 2025-03-24
Form Type: S-4/A
Source: 0001104659-25-027242
Chunk: 171

Company: Kestrel Group Ltd
Filing Date: 2025-03-24
Form: S-4/A
Chunk 171
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 advisor with respect to the particular tax consequences of the combination 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 recognize capital gain (but not loss) equal to the lesser of (1) the excess, if any, of the amount of cash the U.S. Holder receives in lieu of a fractional Bermuda NewCo common share plus the fair market value of any Bermuda NewCo common shares received in the exchange over the U.S. Holder’s tax basis in the US NewCo interests surrendered in exchange therefor and (2) the amount of cash received in lieu of a fractional Bermuda NewCo common share by the U.S. Holder in the exchange;

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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 equal to the tax basis of the US NewCo interests surrendered in exchange therefor, increased by the amount of taxable gain, if any, recognized by the U.S. Holder in the exchange, and decreased by the amount of cash received in lieu of