RICHMOND, Va., June 30, 2020 /PRNewswire/ -- Genworth
Financial, Inc. (NYSE: GNW) announced today that it is moving
forward with plans to address its near-term liabilities and
financial obligations, and maximize shareholder value while China
Oceanwide Holdings Group Co., Ltd. (Oceanwide) finalizes its
funding plan for the acquisition of Genworth. Genworth and
Oceanwide also announced that they have agreed to a 15th waiver and
agreement of each party's right to terminate the previously
announced merger agreement. The 15th waiver extends the previous
deadline of June 30, 2020 to no later
than September 30, 2020.
Given the delay in the closing of the China Oceanwide
transaction, Genworth is taking steps to address its near-term
liabilities, which include liabilities arising under the pending
AXA litigation and approximately $1.0
billion in debt maturing in 2021. Genworth expects these
steps to include a debt offering in the near term and taking the
necessary steps to launch a 19.9 percent IPO of its U.S. Mortgage
Insurance business, subject to market conditions, in the event the
China Oceanwide transaction is terminated.
The extension gives Oceanwide additional time to finalize the
financing for the transaction purchase price of $5.43 per share, which may include debt funding
of up to $1.8 billion through Hony
Capital and/or other third parties. Oceanwide has indicated
that the financing has been delayed due to the COVID-19 pandemic
and uncertain macroeconomic conditions.
15th Waiver and Agreement
Conditions
Genworth and Oceanwide have also agreed to
additional interim milestones. Specifically, the
15th waiver contemplates the submission by Oceanwide to
Genworth of evidence by August 31,
2020 confirming that:
- Approximately $1.0 billion is
available to Oceanwide from sources in Mainland China to fund the
acquisition of Genworth; and
- Hony Capital and/or other acceptable third-parties have
committed to provide Oceanwide $1.0
billion or more from sources outside of China to fund the
transaction.
If these conditions are met, the merger agreement will remain in
place until September 30, 2020. If
the conditions are not met, Genworth has the right, in its sole
discretion, to terminate the merger agreement as of August 31, 2020.
Genworth also will have the right to resolve the AXA litigation,
issue debt or other financing instruments, and pursue offerings of
equity in its subsidiaries, as required to meet its short-term
financial obligations, including but not limited to, any financial
obligations relating to the AXA litigation and the approximately
$1.0 billion of debt due in 2021. If
China Oceanwide disagrees with any steps that Genworth takes to
meet its financial obligations, it has the right to terminate the
transaction, in its sole discretion.
"We heard from our stakeholders that they would like greater
assurance that the Oceanwide transaction is making progress towards
closing," said Tom McInerney,
president and CEO of Genworth. "This extension and associated
milestones address stakeholders' concerns and provide our Board
with the flexibility to execute on our strategic priorities and
maximize shareholder value while we continue to work with Oceanwide
to close the transaction. We continue to believe the transaction
represents the best and most certain value for Genworth's
shareholders."
LU Zhiqiang, chairman of Oceanwide, reiterated his commitment to
the transaction. "We have overcome many hurdles during the past
three and half years and continue to persevere because of the
future value of Genworth to our vision of pursuing the significant
opportunities for long term care (LTC) insurance in the U.S., China
and the rest of Asia. We remain
committed to securing financing for the transaction in order to
close the transaction as soon as possible."
The transaction had previously received all U.S. regulatory
approvals needed to close the transaction, subject to confirmation
from the Delaware Department of Insurance that the acquisition of
Genworth's Delaware-domiciled
insurer may proceed under the existing approval, which Oceanwide
expects to seek upon finalization of its financing. Genworth is
also withdrawing and refiling its FINRA continuing membership
application due to the passage of time. Oceanwide also needs to
receive authorization for currency conversion and transfer of funds
from SAFE.
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; and it is the single largest shareholder of
Australia-listed CuDECO Ltd. 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 closing of the transaction with Oceanwide,
Oceanwide's funding plans and transactions Genworth is pursuing to
address its near-term liabilities and financial obligations,
including resolution of the AXA litigation, which may include
raising debt through its mortgage insurance subsidiaries 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 will be unable to raise funding
and that the transaction with Oceanwide may not be completed in a
timely manner or at all, 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 resolve the AXA litigation on favorable terms or at all,
and that it will be unable to raise new debt financing and/or sell
debt or equity in its subsidiaries to refinance its bonds maturing
in 2021; (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 or will not be received prior to
September 30, 2020 (and either or
both of the parties may not be willing to further waive their end
date termination rights beyond September 30,
2020) 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 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, 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; (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.