May 15, 2014 / 9:56 AM / 4 years ago

Genworth Financial's Australia arm to raise $546 million in IPO

SYDNEY, May 15 (Reuters) - The U.S.’s Genworth Financial Inc said on Thursday it has raised A$583 million ($546.36 million) by selling 34 percent of its Australian subsidiary in what will briefly be the country’s biggest initial public offering (IPO) of the year.

The Richmond, Virginia-based company will sell 200 million shares in Genworth Mortgage Insurance Australia for $2.65 each, and set aside another 20 million shares to meet any additional demand, the company said in a statement.

The stake is within the 30 percent to 40 percent range and the price is within the A$2.20 to A$2.90 band the prospectus said the parent company expected to sell.

The Australian IPO market is warming after a drought of some five years ended in 2013 with a six-fold on-year increase in the value of sales.

The Genworth Australia IPO, which will see the shares trade from May 22, will eclipse the current biggest IPO of the year, that of aged care provider Japara Health Care Ltd which raised A$525 million.

But the Genworth Australia IPO is itself likely to be eclipsed with cleaning and catering company Spotless aiming to raise up to A$1 billion the following day.

In a statement, Genworth Australia Chairman Richard Grellman said the IPO would give the company financial flexibility and improved access to capital markets. ($1 = 1.0671 Australian Dollars) (Reporting by Byron Kaye; Editing by Christopher Cushing)

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