April 23 (Reuters) - Genworth Financial Inc revived plans for an initial public offering of its Australian mortgage insurance unit, nearly two years after it pushed back the IPO citing unfavorable market conditions in that country.
The life and mortgage insurer filed a prospectus with the Australian Securities and Investments Commission for an IPO of up to 40 percent of the unit’s shares.
The company expects to raise between $400 million and $700 million from the offering and use the proceeds to repay certain inter-company funding arrangements.
In April 2012, Genworth delayed the unit's IPO, raising investor concerns that the mortgage insurer's capital deployment plan would hit a roadblock due to the delay. (r.reuters.com/qaz68v)
Australia’s IPO drought of some five years ended in 2013 with a six-fold on-year increase in the value of sales, while the stock index built on a 2012 recovery with a 15 percent rise. The shares of several large IPOs, however, have since languished below their sale prices.
Australia’s Mantra Hotels abandoned its IPO plans last month after scaring away investors with its high price. A similar fate recently befell retailer OzSale and Stirling Early Education.
Genworth Financial said late Tuesday that the completion of the offering is subject to market conditions and valuation considerations.
Mortgage insurers cover losses when homeowners default and foreclosures fail to recoup costs.
Genworth, spun off from industrial conglomerate General Electric in 2004, reported a better-than-expected quarterly profit in February as a recovery in housing markets helped its U.S. mortgage insurance business. (Reporting by Arnab Sen in Bangalore; Editing by Gopakumar Warrier)