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UPDATE 2-Genworth pushes back Australian unit IPO, shares fall
April 17, 2012 / 9:21 PM / 6 years ago

UPDATE 2-Genworth pushes back Australian unit IPO, shares fall

April 17 (Reuters) - Life and mortgage insurer Genworth Financial pushed back the initial public offering of its Australian mortgage insurance unit due to unfavorable market conditions in the country, sending its stock down 6 percent in trading after the bell.

Genworth said it now aims to complete the IPO of 40 percent of the unit in early 2013. It had initially expected to complete the offering in the second quarter of this year.

The company, which has been hurt by troubles in its U.S. mortgage insurance business, planned to offer the stake in the Australian unit as a way to boost its capital.

Genworth, once part of industrial conglomerate General Electric, also said it expects foreclosure rates and claims in Australia to be higher in the first quarter.

It expects the Australian business, one of the bright spots in its mortgage insurance segment, to post a modest first quarter loss.

In January, a media report said the company had shortlisted Macquarie Group, UBS and Commonwealth Bank of Australia as joint lead managers of the planned A$800 million ($850 million) float.

There has been a drought in Australian IPO market with the last big deal being QR National’s A$4.6 billion IPO in late 2010. A successful listing of the Genworth unit this year would have been taken as a sign that investors, wary of global economic uncertainty so far, were coming back.

Shares of the Richmond, Virginia-based company were down 6 percent at $7.22 in extended trade. They had closed at $7.70 on Tuesday on the New York Stock Exchange.

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