Private mortgage insurance provider Genworth MI Canada could be sold in whole or part to facilitate the proposed merger of its US parent company.
Genworth Financial issued a statement Monday to say that it plans to solicit interest in a potential disposition of its interests in Genworth MI Canada.
The Richmond, VA headquartered firm is intending to merge with China Oceanwide Holdings Group and the two have extended their merger deadline while they consider strategic alternatives for the Canadian mortgage insurance business.
Canadian regulators are reviewing the proposed merger and how it would affect the Canadian business but Genworth says this has resulted in a delay for their merger plan without a clear path forward.
"MI Canada is one of our top-performing businesses. However, the lack of transparent feedback or guidance from Canadian regulators about their review left us no choice but to look at strategic alternatives for MI Canada that would eliminate the need for Canadian regulatory approval of the Oceanwide transaction," said Tom McInerney, president and CEO of Genworth.
The firm says that selling all or part of Genworth MI Canada would also help satisfy future debt maturities.
Genworth says it owes it to its stakeholders to close the merger as soon as possible but acknowledges a further delay may be necessary to allow for the disposal of Genworth MI Canada.
Stuart Levings, Genworth MI Canada’s president and CEO says the Canadian business is focused on its own strategic priorities and the needs of its stakeholders.
"Our board of directors and the special committee of independent directors, which was established in 2016 in connection with the Genworth Financial - Oceanwide transaction, will continue to monitor the status of that transaction and, as necessary, engage with Genworth Financial and other parties regarding the potential disposition of its interest in the Company or other strategic alternatives,” said Levings.
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