Genworth Financial Inc. has sold its ownership stake in an Australian business subsidiary to help pay off debts it owes for a legal settlement.
The Henrico County-based insurance company announced late Sunday that its subsidiaries Genworth Financial International Holdings LLC and Genworth Holdings Inc. as partners have sold, through an underwritten agreement, about 214.3 million shares in Genworth Mortgage Insurance Australia Limited at $2.28 per share.
The sale represents Genworth’s entire ownership position in Genworth Australia. The settlement of the sale is expected to occur on Wednesday.
The sale will help pay off debts that Genworth owes to the French insurer AXA to settle a dispute related to liability for payment protection insurance misselling losses that incurred by two companies that AXA acquired from Genworth in 2015.
“We’re pleased to take this additional step in our revised strategic plan. This transaction will help enhance our holding company liquidity ahead of our near-term obligations, including our debt due in September 2021 and upcoming AXA liabilities due in 2022,” Tom McInerney, Genworth’s president and CEO, said in statement.
Genworth said the transaction will result in a payment of about $247 million under its outstanding promissory notes to the French company AXA. The net proceeds available to Genworth will be about $123 million in U.S. dollars.
The sale comes about one month after Genworth said its plan to merge with the China-based company China Oceanwide Holdings Group Co. Ltd. had been put on indefinite hold.
Genworth, an insurance company with thousands of employees in Virginia, said it would instead focus on pursuing a contingency plan to pay its debts that could include a partial, initial public offering of stock for its U.S. mortgage insurance business.