Company: KG
Filing Date: 2025-03-10
Form Type: S-4
Source: 0001104659-25-021993
Chunk: 81

Company: Kestrel Group Ltd
Filing Date: 2025-03-10
Form: S-4
Chunk 81
---
 including any increases in the rates. The timing of such approval processes, as well as the willingness of insurance regulators to approve licensing changes or rate increases, can impact the profitability of new policies written by the combined company, which in turn can cause fluctuations in the combined company’s revenue and earnings. If the combined company is unable to obtain approval for the requested licensing or rate changes, or if such approval is delayed, its financial condition, results of operations and liquidity may be adversely affected.

Even if the combination qualifies as a transaction described in Section 351 of the Code, a U.S. Holder of Maiden shares may still recognize gain as a result of the first merger if Maiden is or was classified as a passive foreign investment company (“PFIC”) for any taxable year during which a U.S. Holder held Maiden shares.

Pursuant to Section 1291(f) of the Code, to the extent provided in U.S. Treasury Regulations promulgated under the Code (the “Treasury Regulations”), even if the combination qualifies as a transaction described in Section 351 of the Code, if Maiden was a PFIC for any taxable year during a U.S. Holder’s holding period for the Maiden shares, certain adverse U.S. federal income tax consequences, including recognition of gain, could apply to such U.S. Holder as a result of the first merger, unless certain exceptions apply. Based on the nature of Maiden’s business, the projected composition of its income and the projected composition and estimated fair market values of its assets, Maiden does not believe it was a PFIC for its taxable year ended on December 31, 2024 and does not expect to be a PFIC for its taxable year ending on December 31, 2025, or the succeeding taxable year. However, because there is significant uncertainty in the application of the PFIC rules, no assurance can be given that Maiden was not previously a PFIC and will not be a PFIC for its taxable year ending December 31, 2025, or any subsequent taxable year.

Holders of Maiden shares should consult such holders’ tax advisors regarding the possible classification of Maiden as a PFIC and the resulting U.S. federal income tax considerations. See the section of this proxy statement/prospectus titled “Tax Consequences of the Combination — U.S. Federal Income Tax Consequences of the Combination to U.S. Holders of Maiden Shares — Passive Foreign Investment Company Rules”.

The ability of Bermuda NewCo’s subsidiaries to use net operating loss carryforwards and other tax attributes may be