Genworth Talks About May 2018

Genworth Financial Inc. has a significant amount of debt that’s on track to mature in May 2018.

Genworth, which has been a major player in the U.S. annuity and stand-alone long-term care insurance (LTCI) markets, has been hoping to use $600 million in cash from China Oceanwide Holdings Group Co. Ltd., a would-be acquirer, to make the payments.

Genworth and China Oceanwide are still working hard to complete the deal, but continuing delays in getting regulatory approvals for the deal could force Genworth to look for other strategies for meeting its obligations, Genworth said in a document filed today with the U.S. Securities and Exchange Commission.

(Related: Genworth and China Oceanwide Hint at U.S. Panel National Security Concerns) 

Genworth talked about the May 2018 debt payment financing issue in routine reports filed in connection with the release of its results for the third quarter.

Most publicly traded companies hold conference calls with securities analysts to go over their earnings reports, but many of those companies suspending earnings calls while in the middle of efforts to complete major mergers. Genworth has stopped holding earnings calls while the China Oceanwide deal effort is under way.

China Oceanwide announced plans to acquire Genworth about a year ago. The federal Committee on Foreign Investment in the U.S., an agency that reviews the possible national security implications of international corporate deals, recently raised questions about the China Oceanwide-Genworth deal, and Genworth said in September that it was working on mitigating those concerns. Genworth did not disclose the nature of the concerns but appeared to imply that they could have something to do with policy administration.

Genworth reported $175 million in net income for the third quarter on $2.2 billion in revenue, compared with a net loss of $380 million in net income on $2.2 billion in revenue for the third quarter of 2016.