XL Group plc announced a proposal to change its parent holding company’s place of incorporation to Bermuda from Ireland.
“Establishing our corporate home in Bermuda is a natural step for XL. XL has had a presence in Bermuda since 1986, which grew significantly following the transformative transaction with Bermuda-based Catlin last year,” said XL’s Chief Executive Officer, Michael S. McGavick, in a statement.
“A significant portion of XL’s business, in fact our largest operating subsidiary, has for decades been located in Bermuda and regulated by the Bermuda Monetary Authority…,” he said.
“Further, the BMA’s regulatory regime and its expertise as an international financial regulator has recently been acknowledged and endorsed with it being determined fully equivalent to Solvency II by the European Union’s Commission, Parliament and Council,” McGavick continued.
“Following the Catlin transaction, and with the recent determination of full Solvency II equivalence for Bermuda, it has been concluded that the BMA is best situated to serve as XL’s group-wide supervisor and to approve XL’s internal capital model. This is a change that we believe will benefit XL’s clients, partners, and shareholders alike.”
XL does not expect the redomestication will have any material impact on its financial results, including the company’s global effective tax rate.
To effect the redomestication, XL Group Ltd. would replace XL Group plc as the ultimate holding company of the XL group of companies, and the company’s ordinary shareholders would receive one common share of the new Bermuda company in exchange for each ordinary share of the company held by them.
XL expects to submit the proposal for redomestication, along with related proposals, to its shareholders in the next several months and complete the transaction in the third quarter of 2016.
The proposed redomestication will be subject to receipt of necessary regulatory approvals, approval by the company’s ordinary shareholders, satisfaction of other conditions and sanctioning by the High Court of Ireland.
XL will continue to be registered with the U.S. Securities and Exchange Commission and be subject to SEC reporting requirements applicable to domestic registrants. Further, the company will continue to be subject to the applicable corporate governance rules of the New York Stock Exchange and will continue to report its financial results in U.S. dollars and under U.S. generally accepted accounting principles.
The company’s shares will continue to trade on the NYSE under the ticker symbol “XL” and it expects that XL will remain included in the S&P 500.
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