Company: MHLA
Filing Date: 2025-03-26
Form Type: DEFM14A
Source: 0001104659-25-028254
Chunk: 170

Company: Maiden Holdings, Ltd.
Filing Date: 2025-03-26
Form: DEFM14A
Chunk 170
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 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 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