RICHMOND, Va., Jan. 4, 2021 /PRNewswire/ -- Genworth
Financial, Inc. (NYSE: GNW) (Genworth, the Company) and China
Oceanwide Holdings Group Co., Ltd. (Oceanwide) today provided an
update on their pending transaction.
Given uncertainty around the completion and timing of the
remaining steps required to close the transaction, Genworth and
Oceanwide have not extended the current December 31, 2020 "end date" under the merger
agreement. Oceanwide has indicated that the factors contributing to
the delay since the parties agreed to their most recent extension
of the merger agreement on November 30,
2020 were: (a) the finalization of the Hony Capital
financing terms; and (b) the COVID-19 pandemic and associated
restrictions. However, the merger agreement remains in effect,
although either party is able to terminate the merger agreement at
any time. Oceanwide has shared that it will continue to work
towards closing the transaction, and Genworth remains open to
completing the transaction if Oceanwide completes the remaining
steps.
In the interim, Genworth is focusing on executing its
contingency plan, including a potential partial IPO of Genworth's
U.S. Mortgage Insurance (U.S. MI) business, designed to meet its
near-term liabilities of approximately $1.0
billion of debt due in 2021. An IPO of U.S. MI will be
subject to market conditions as well as the satisfaction of various
conditions and approvals. The contingency plan also addresses the
need to further align the Company's expense structure with its
business activities.
These steps build on the progress Genworth has already made as
part of its contingency plan, including the sale of its Canadian
mortgage insurance business for approximately $1.8 billion in December
2019 and the completion of a $750
million debt offering at the U.S. MI holding company level
in August 2020. In addition, Genworth
settled its litigation with AXA in July
2020.
As a result of these actions and other measures to further
improve its financial position and manage its operating expenses,
Genworth has reduced holding company debt over time and built a
solid position of approximately $1.0
billion in cash and liquid assets as of December 31, 2020. Approximately $340 million of this cash balance is ring-fenced
to pay for Genworth's February 2021
senior notes at maturity. As previously disclosed, Genworth intends
to manage the U.S. life insurance companies on a standalone basis
with no plans to infuse capital into those companies in the future,
absent an Oceanwide transaction.
James Riepe, non-executive
chairman of the Genworth Board, said: "When we considered our most
recent extensions of the merger agreement, Genworth's Board of
Directors believed we were on a path to a near-term closing based
on the information we were provided. Given the most recent update,
we do not believe a closing can occur in the near term. Thus, the
management team will fully focus its efforts on executing our
contingency plan. We appreciate the continuing patience of our
shareholders, employees and other stakeholders as we continue to
pursue steps that will maximize Genworth's value."
Tom McInerney, Genworth president
and CEO, continued: "While we are disappointed that we could not
close the transaction by the end of 2020, the parties retain the
ability to ultimately complete the transaction if Oceanwide can
secure the required funding and the parties can complete the
remaining steps to closing, and if the transaction is still in the
best interests of Genworth at that time. At the same time, we are
moving forward with our contingency plan to meet our near-term
obligations and maximize long-term value, which we believe is the
best approach for our shareholders."
LU Zhiqiang, chairman of Oceanwide, added: "We believe the value
of the transaction is significant for both parties' stakeholders,
and are continuing to work towards completing the transaction with
Genworth."
The transaction previously received all U.S. regulatory
approvals needed to close the transaction. However, given the
passage of time as well as the terms of these approvals, the
parties will need to assess whether re-approvals or confirmations
are necessary at the appropriate time.
Genworth will host an investor call before the market opens on
January 5, 2021 to review today's
announcement and address shareholder questions. A separate news
release with conference call details will be forthcoming, at which
time the information for the call will be available on the
company's website, http://investor.genworth.com.
This news release is not an offer to sell, or a solicitation of
an offer to buy, any securities.
About Genworth Financial
Genworth Financial, Inc.
(NYSE: GNW) is a Fortune 500 insurance holding company committed to
helping families achieve the dream of homeownership and address the
financial challenges of aging through its leadership positions in
mortgage insurance and long term care insurance. Headquartered
in Richmond, Virginia, Genworth
traces its roots back to 1871 and became a public company in
2004. For more information, visit genworth.com.
From time to time, Genworth releases important information via
postings on its corporate website. Accordingly, investors and other
interested parties are encouraged to enroll to receive automatic
email alerts and Really Simple Syndication (RSS) feeds regarding
new postings. Enrollment information is found under the "Investors"
section of genworth.com. From time to time, Genworth's
publicly traded subsidiary, Genworth Mortgage Insurance Australia
Limited, separately releases financial and other information about
its operations. This information can be found at
http://www.genworth.com.au.
About Oceanwide
Oceanwide is a privately held, family
owned international financial holding group founded by LU Zhiqiang.
Headquartered in Beijing, China,
Oceanwide's well-established and diversified businesses include
operations in financial services, energy, technology information
services, culture and media, and real estate assets globally,
including in the United
States.
Oceanwide is the controlling shareholder of the Shenzhen-listed Oceanwide Holdings Co., Ltd.
and Minsheng Holdings Co. Ltd.; the Hong
Kong-listed China Oceanwide Holdings Limited and China
Tonghai International Financial Limited (formerly known as Quam
Limited); the privately-held International Data Group, Minsheng
Securities, Minsheng Trust, and Asia Pacific Property &
Casualty Insurance. China Oceanwide also is a minority
investor in Shanghai-listed
China Minsheng Bank and Hong Kong-listed Legend Holdings. In
the United States, Oceanwide has
real estate investments in New
York, California, and
Hawaii. Businesses controlled by
Oceanwide have more than 10,000 employees globally.
Cautionary Note Regarding Forward-Looking Statements
This communication includes certain statements that may
constitute "forward-looking statements" within the meaning of the
federal securities laws, including Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Forward-looking statements may be
identified by words such as "expects," "intends," "anticipates,"
"plans," "believes," "seeks," "estimates," "will" or words of
similar meaning and include, but are not limited to, statements
regarding the potential termination, extension or closing of the
transaction with Oceanwide, Oceanwide's funding plans and
regulatory approvals in the event an extension is pursued, actions
Genworth may take to align its expense structure with anticipated
business needs and transactions Genworth is pursuing to address its
near-term liabilities and financial obligations, which may include
additional debt financing and/or transactions to sell a percentage
of its ownership interests in its mortgage insurance businesses.
Forward-looking statements are based on management's current
expectations and assumptions, which are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. Actual outcomes and results may differ
materially from those in the forward-looking statements and factors
that may cause such a difference include, but are not limited to,
risks and uncertainties related to: (i) the risk that Oceanwide
and/or Genworth determines to terminate the merger agreement or
that Oceanwide will be unable to complete funding and that the
transaction with Oceanwide may not be completed in a timely manner
or at all, any of which may adversely affect Genworth's business
and the price of Genworth's common stock, and the risk that
Genworth will be unable to address its near-term liabilities and
financial obligations, including the risks that it will be unable
to raise additional debt financing and/or sell a percentage of its
ownership interest in its U.S. mortgage insurance business to repay
the promissory note to AXA S.A. or refinance its debt maturing in
2021 or beyond; (ii) the parties' inability to obtain regulatory
approvals, clearances or extensions, or the possibility that such
regulatory approvals or clearances may further delay the
transaction with Oceanwide, to the extent the transaction is
pursued or that materially burdensome or adverse regulatory
conditions may be imposed or undesirable measures may be required
in connection with any such regulatory approvals, clearances or
extensions (including those conditions or measures that either or
both of the parties may be unwilling to accept or undertake, as
applicable) or that with continuing delays, circumstances may arise
that make one or both parties unwilling to proceed with the
transaction with Oceanwide or unable to comply with the conditions
to existing regulatory approvals or one or both of the parties may
be unwilling to accept any new condition under a regulatory
approval; (iii) the risk that the parties will not be able to
obtain other regulatory approvals, approvals, clearances or
extensions, including in connection with a potential alternative
funding structure or the current geo-political environment, or that
one or more regulators may rescind or fail to extend existing
approvals, or that the revocation by one regulator of approvals
will lead to the revocation of approvals by other regulators; (iv)
the parties' inability to obtain any necessary regulatory
approvals, clearances or extensions for the post-closing capital
plan, and/or the risk that a condition to the closing of the
transaction with Oceanwide may not be satisfied or that a condition
to closing that is currently satisfied may not remain satisfied due
to the delay in closing the transaction with Oceanwide or that the
parties are unable to agree upon a closing date following receipt
of all regulatory approvals and clearances; (v) potential legal
proceedings that may be instituted against Genworth related to the
transactions with Oceanwide; (vi) the risk that the proposed
transaction or its termination disrupts Genworth's current plans
and operations as a result of the announcement and consummation of
the transaction; (vii) potential adverse reactions or changes to
Genworth's business relationships with clients, employees,
suppliers or other parties or other business uncertainties
resulting from the announcement of the transaction or during the
pendency of the transaction or as a result of the termination of
the transaction, including but not limited to such changes that
could affect Genworth's financial performance; (viii) certain
restrictions during the pendency of the transaction that may impact
Genworth's ability to pursue certain business opportunities or
strategic transactions; (ix) continued availability of capital and
financing to Genworth before the consummation of the transaction;
(x) further rating agency actions and downgrades in Genworth's
financial strength ratings; (xi) changes in applicable laws or
regulations; (xii) Genworth's ability to recognize the anticipated
benefits of the transaction; (xiii) the amount of the costs, fees,
expenses and other charges related to the transaction or the
potential inability to significantly reduce costs in connection
with any proposed resource alignment; (xiv) the risks related to
diverting management's attention from Genworth's ongoing business
operations; (xv) the impact of changes in interest rates and
political instability; and (xvi) other risks and uncertainties
described in the Definitive Proxy Statement, filed with the SEC on
January 25, 2017, and Genworth's
Annual Report on Form 10-K, filed with the SEC on February 27, 2020. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Consequences of material differences in
results as compared with those anticipated in the forward-looking
statements could include, among other things, business disruption,
operational problems, financial loss, legal liability to third
parties and similar risks, any of which could have a material
adverse effect on Genworth's consolidated financial condition,
results of operations, credit rating or liquidity. Accordingly, we
caution you against relying on any forward-looking statements.
Further, forward-looking statements should not be relied upon as
representing Genworth's views as of any subsequent date, and
Genworth does not undertake any obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
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SOURCE Genworth Financial, Inc.