April 23 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
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