Oceanwide has all regulatory approvals to close Genworth's transactionChristian Fernsby ▼ | April 1, 2020
Genworth Financial China Oceanwide Holdings Group announced that the Virginia State Corporation Commission, Bureau of Insurance has reapproved the proposed acquisition of control by Oceanwide of Genworth's insurance companies domiciled in Virginia.
Virginia Genworth Financial China Oceanwide Holdings Group
Topics: Oceanwide Genworth
In addition, Genworth and Oceanwide have agreed to a 14th waiver and agreement of each party's right to terminate the previously announced merger agreement.
The 14th waiver extends the previous deadline of March 31, 2020 to no later than June 30, 2020.
This three-month extension is a prudent step the parties are taking because of the significantly higher volatility and substantially reduced liquidity in the global financial markets due to the coronavirus pandemic, which has negatively impacted financing global acquisitions.
The parties are targeting a closing date closer to the end of May, if feasible, but given the unprecedented market disruptions, Oceanwide and Genworth believe it is prudent to build in a cushion and extend the deadline to no later than June 30, 2020.
The parties expect that Oceanwide's existing financing arrangement for debt funding of up to $1.8 billion through Hony Capital will be extended through June 30, 2020.
Under the waiver, Oceanwide waives Genworth's ongoing compliance with certain covenants set forth in the merger agreement.
The waiver also provides termination rights for Oceanwide to the extent that regulators subsequently impose materially adverse conditions on the transaction, and other mutual termination rights for the parties.
As previously disclosed, the National Development and Reform Commission (NDRC) accepted Oceanwide's filing with respect to the proposed acquisition of Genworth in October 2018, which concluded the NDRC's review process.
Once Oceanwide has finalized its financing plan, Oceanwide will discuss currency conversion and transfer of funds with China's State Administration of Foreign Exchange (SAFE).
Oceanwide is also seeking confirmation from the Delaware Department of Insurance that the acquisition of Genworth's Delaware domiciled insurer may proceed under the existing approval, which Oceanwide expects to receive upon finalization of its financing. ■