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June 30, 2020 at 03:14 PM
Genworth Financial Inc. says China Oceanwide Holdings Group Co. Ltd. of Beijing is having trouble nailing down the financing it needs to pay to acquire Genworth.
China Oceanwide — a financial services and real estate development company based in Beijing — has been trying to acquire Genworth for about four years. The company is in the process of closing on a $1.8 billion financing arrangement from Hony Capital, a big, Hong Kong-based private equity firm.
“Oceanwide has indicated that the financing has been delayed due to the COVID-19 pandemic and uncertain macroeconomic conditions,” Genworth said in a comment included in the financing delay announcement.
(Related: Genworth Aims to Line Up Backup Financing Options)
China Oceanwide has major developments in the center of Wuhan, which was hit especially hard by the COVID-19 outbreak.
Genworth and China Oceanwide said they will push the deal completion deadline back to Sept. 30, from June 30.
The extension is the 15th the companies have announced.
Genworth is a Richmond, Virginia-based company that is a large player in the mortgage insurance markets in the United States and Australia.
It sells some stand-alone long-term care insurance (LTCI), and it has been a major player in the life, annuity and LTCI markets.
The company has $1 billion in debt coming due in 2021 and potential liabilities related to litigation with AXA.
Because of the delay in the China Oceanwide deal closing, Genworth is preparing to handle the payments by borrowing money, and, possibly, by selling a 19.9% stake in the U.S. mortgage insurance business to the public, through an initial public offering, Genworth said.
