Genworth Financial has signed an underwritten agreement to sell its entire stake in Genworth Mortgage Insurance Australia (Genworth Australia) in a bid to improve liquidity.
As agreed, Genworth’s wholly-owned subsidiaries Genworth Financial International Holdings and Genworth Holdings sold around 214.3 million shares in Genworth Australia at A$2.28 ($1.77) per share.
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At completion, the transaction will result in a payment of around $247m under its outstanding AXA promissory note, pursuant to its terms as amended by the associated parties.
The net proceeds available to Genworth will amount to around $123m.
Genworth President and CEO Tom McInerney said: “We’re pleased to take this additional step in our revised strategic plan. This transaction will help enhance our holding company liquidity ahead of our near-term obligations, including our debt due in September 2021 and upcoming AXA liabilities due in 2022.”
The company also noted that it will continue to prepare for a potential partial IPO of its US Mortgage Insurance (U.S. MI) business, subject to market conditions and other necessary approvals.
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By GlobalDataHeadquartered in Richmond, Virginia, Genworth Financial is a Fortune 500 insurance holding company. It became public in 2004.
Last year, the company reached an agreement with AXA to settle the dispute relating to liability for payment protection insurance (PPI) mis-selling losses.
Under the terms of the settlement, Genworth paid AXA £100m ($125m).
