After closing the Friday trading 16.88% up at $23.54, Global Indemnity Group, LLC (GBLI) started Monday at $22.80.
The gain on Friday was because of an announcement of completing redomestication process of its portfolio to the United States. The companies involved in the process include Global Indemnity Limited (GI) and its Bermuda-based subsidiary Global Indemnity Reinsurance Company, Ltd. (GI Bermuda). The Delaware-based GBLI is a limited liability company incorporated as partnership firm for taxations matters. The Cayman Island headquartered GI was the parent company of Global Indemnity. After the redomestication of the firm, Global Indemnity Group, LLC became official parent company of Global Indemnity effective Friday.
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The shareholders of GI become the owner of GBLI. However being public listed parent company, Class A common Shares of GBLI will continue trading under same ticker.
Virginia-based Penn-Patriot Insurance Company (“Penn-Patriot”) is one of the U.S. insurance company subsidiaries of Global Indemnity. On August 26, 2020, Penn-Patriot came merging with GI Bermuda. Penn-Patriot completely takes over the GI Bermuda as a surviving party. This brought GI Bermuda’s whole business into the United States.
The transactions completed as a result of redomestication process will make GBLI’s business more efficient and simple. Organizational restructuring will also help the company save administrative expenses. Restructuring resulted in elimination of four of the company’s subsidiaries. Now the company has left with no subsidiary out of the US. The process also reduced the number of countries from 4 to 1 regulating the company. The company also has to pay tax only in 1 country now. Previously it was subject to taxation in 3 countries. All this made the US as only country that will tax, govern and regulate the company now.
In course of redomestication, Global Indemnity lessened an amount of $1 billion in debts payable inter-company. This also resulted in reduction of $174 million of external debts which equals to 57% of its total debt. The transactions eventually provided GBLI with nearly $250 million of cash and other assets.
The stock price was -2.17% down at the time of publication.