RICHMOND, Va. and BEIJING, Oct. 1,
2020 /PRNewswire/ -- Genworth Financial, Inc. (NYSE:
GNW) and China Oceanwide Holdings Group Co. Ltd (Oceanwide)
announced today that Oceanwide has reached a general agreement with
Hony Capital on the key commercial terms and conditions of its
$1.8 billion offshore financing plan
to complete the acquisition of Genworth, and that Oceanwide has
provided satisfactory information regarding its funding plan for
the portion of the funds being sourced from Mainland China.
However, while Oceanwide has made significant progress towards
finalizing its financing plan for the proposed transaction, it has
not reached a final agreement with Hony Capital on all terms and
conditions due to the logistical challenges presented by the global
pandemic, including travel restrictions and mandatory quarantine
requirements. These challenges have significantly lengthened
the time required for Oceanwide and Hony Capital to hold in-person
discussions to finalize these terms and conditions.
As a result of these delays, the parties also today announced
that they have agreed to a 16th waiver and agreement of each
party's right to terminate their previously announced merger
agreement. The 16th waiver extends the previous deadline of
September 30, 2020 to no later than
November 30, 2020.
The duration of the extension was informed by both Oceanwide and
Genworth's expectation of further delays due to continued required
travel and quarantine restrictions in the near-term. It also takes
into account the upcoming Chinese national holiday, Mid-Autumn
Festival, which will take place from October
1 through October 8. Negotiations between Oceanwide and Hony
Capital will resume following this holiday.
Oceanwide has confirmed that Oceanwide's existing financing
arrangement for debt funding of up to $1.8
billion through Hony Capital has been extended through
December 31, 2020.
The parties also agreed to an interim checkpoint on October 31, 2020, by which time Oceanwide needs
to provide Genworth with satisfactory evidence that the necessary
funding will be available to close the transaction by November
30. If Oceanwide does not deliver evidence satisfactory to
Genworth by October 31, Genworth will
have the right, in its sole discretion, to terminate the merger
agreement on or after October 31,
2020.
"We have overcome many hurdles during the past four years,
demonstrating time and again our unwavering commitment to this
transaction," said LU Zhiqiang, chairman of Oceanwide. "The
COVID-19 pandemic has presented a unique set of challenges to
deal-making that traditionally relies on face-to-face
communications, which is why the additional time is necessary to
finalize these remaining steps. Despite these latest challenges, we
remain committed to securing financing for the transaction in order
to close the transaction as soon as possible."
Added Tom McInerney, Genworth
president and CEO: "As we extend the waiver and agreement again, it
is important to remember that it wasn't until the end of
March 2020 that we received
substantially all the regulatory approvals needed to close the
transaction. That put Oceanwide in the difficult position of
completing the funding process in the middle of a global pandemic.
I recognize that this has been an extraordinarily long road to
travel for our shareholders, regulators, employees and other
stakeholders, and we greatly appreciate their patience. We are
committed to continuing to work with Oceanwide to close the
transaction because we believe that the transaction represents the
best value for Genworth's shareholders."
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. The parties also are still in discussions with
the GSEs about their previous approval of the transaction, and
Oceanwide needs to receive clearance for currency conversion and
transfer of funds from SAFE. With respect to other regulatory
matters: FINRA has confirmed that the transaction may close under
FINRA Rule 1017(c) prior to receiving its final approval and the
North Carolina Department of Insurance issued a 90-day extension of
its previously granted approval on August 11, 2020. All
other required approvals and clearances have been secured.
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, 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
will be unable to complete 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 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 or will
not be received prior to November 30,
2020 (and either or both of the parties may not be willing
to further waive their end date termination rights beyond
November 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.