GI Bermuda has recently merged into Penn-Patriot Insurance Company (Penn-Patriot), a Virginia-domiciled subsidiary of Global Indemnity
Global Indemnity redomesticates its insurance businesses to the US. (Credit: Gerd Altmann from Pixabay)
Cayman Islands-based Global Indemnity has completed the redomiciliation of its indemnity business and its Bermuda subsidiary Global Indemnity Reinsurance Company Ltd. (GI Bermuda), to the US.
The company’s Cayman Islands-based business, Global Indemnity Limited has been replaced as the publicly listed parent company of Global Indemnity. Its previous shareholders will now become the shareholders of the parent company, while its Class A Common Shares will continue to trade under the stock ticker symbol ‘GBLI’.
GI Bermuda merged into Penn-Patriot Insurance Company (Penn-Patriot), a Virginia-domiciled subsidiary of the Global Indemnity, on August 26, 2020. The merger enabled Global Indemnity to assume GI Bermuda’s business by its existing US insurance subsidiaries.
The redomestication and related transactions are said to simplify the company’s organisational, statutory and regulatory structure and are expected to result in inter-company efficiencies and long-term administrative cost savings.
The transaction resulted in elimination of four subsidiaries which were previously part of Global Indemnity’s organisational structure, along with all of its foreign subsidiaries.
Also, the transactions reduced the number of nations governing Global Indemnity, in which Global Indemnity is subject to material taxation, and enabled the US to become the company’s only governing, regulating and taxing nation.
The redomestication simplifies the organisational structure of Global Indemnity
As part of the redomestication, Global Indemnity has nearly $1bn of inter-company indebtedness, eliminated $174m of external indebtedness, which reduced its debt-to-capitalisation ratio from 29% to 15%, and offered around $250m of cash and investments to the parent company.
The company said that redomestication was completed without any material transaction-related taxes to Global Indemnity, and the expected future expense savings and operating efficiencies would balance the anticipated increase in prospective tax liabilities due to the transactions.
The company’s Class A Common Shares are registered with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934, and is subject to SEC reporting requirements applicable to domestic registrants.
For the redomestication and related transactions, Fox Paine & Company advised Global Indemnity in regard to the conceptualisation, design, structuring and execution.