Thomas McInerney,, president and chief executive officer of Genworth Financial Inc., listens to a question during a Bloomberg Television interview in New York, U.S., on Friday, June 27, 2014. Thomas McInerney (Photo: Victor J. Blue/BB)

The company trying to acquire Genworth Financial Inc. has agreed to keep working on completing the deal.

Genworth and a unit of China Oceanwide Holdings Group Co. Ltd. have agreed to a fifth deal negotiation extension.

The current extension, which is the fourth, expires Saturday.

The new extension expires Aug. 15.

(Related: Genworth Clears Major Obstacle to Completing China Oceanwide Deal)

Genworth is a Richmond, Virginia-based company that has a large, active mortgage insurance business. It also been a major player in the U.S. life insurance, annuity and long-term care insurance markets.

China Oceanwide is a Beijing-based real estate development and financial services company. It announced  plans to try to acquire Genworth in October 2016.

The companies achieved a major milestone earlier this month when a secretive U.S. deal national security review agency, the Committee on Foreign Investment in the United States, decided to let the deal move forward.

Xiaoxia Zhao, the general manager of Asia Pacific Global Capital Co. Ltd., a China Oceanwide unit, and the president of China Oceanwide’s Asia Pacific Global Capital USA Corp. unit, is the China Oceanwide representative who actually signed the extension agreement for China Oceanwide.

Genworth said Thursday, in a press release announcing the deal completion data extension, that it and China Oceanwide seek approvals for the transaction from agencies in the United States, China and other international jurisdictions.

Genworth said it and China Oceanwide are also working on the plan for China Oceanwide to provide a total of $1.5 billion in capital for Genworth, over time, after the completion of the deal.

“The contribution would be used to further improve Genworth’s financial stability, which could include retiring Genworth’s debt due in 2020 and 2021 or enabling future growth opportunities,” Genworth said.

Capital Needs Changes

The companies are talking about new uses for the China Oceanwide capital contribution partly because Genworth’s situation has changed.

Originally, Genworth had been trying to separate the subsidiary mainly responsible for ts long-term care insurance (LTCI) operations from a subsidiary mainly responsible for life and annuity operations.

Delaware regulators expressed concerns about “unstacking” the companies, and Genworth executives said in May that they would try to proceed without unstacking the two units.

Because Genworth has backed away from the unstacking proposal, and because it has already made other arrangements to handle debt obligations that came due in May, China Oceanwide will no longer make capital contributions related to the unstacking proposal or to the May debt payments, Genworth said.

Executive Comments

Tom McInerney, Genworth’s president, said in a statement that Genworth recognizes that deal negotiations will likely extend beyond Aug. 15.

“Genworth and Oceanwide continue to be committed to the transaction and are pleased to have turned our attention to obtaining the remaining regulatory approvals, now that the Committee on Foreign Investment in the United States has completed its review of our transaction,” McInerney said.

Lu Zhiqiang, chairman of China Oceanwide, said his company is encouraged by the good progress China Oceanwide and Genworth are making.

China Oceanwide is “focused on working with Genworth to obtain the remaining required regulatory approvals, with the goal of closing the transaction as soon as possible,” Lu said.

— Read Genworth  and China Oceanwide Hint at U.S. Panel National Security Concerns, on ThinkAdvisor.

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