GE Cuts Stake In Genworth
By Mark E. Ruquet
NU Online News Service, March 8, 4:07 p.m. EST?GE said it is cutting its stake in Genworth Financial Inc. with the sale of 82 million shares of Genworth common stock.[@@]
The sale would cut the Fairfield, Conn., company’s stake in Genworth to 51 percent from 70 percent, according to the company.
Genworth was formed last year after GE decided to spin-off its life and mortgage insurance operations into the one unit.
GE said the sale will be made through a public offering and a sale to Citigroup Global Markets Inc.
Genworth plans to repurchase between $400 million and $500 million of Genworth Class B common stock at the net price GE will receive in the public offering.
Morgan Stanley, J.P. Morgan and Merrill Lynch are the lead managers in the sale of the stocks.
In a statement, GE Chairman and Chief Executive Officer Jeff Immelt said, “These actions are consistent with our strategy to continue to reduce our investment in insurance and will accelerate GE cash flow growth.”
The proceeds from the sale will be used to “eliminate ‘parent-supported’ debt at GE Capital and enable GE Capital to increase” its dividend to GE from 10 percent of its earnings to 40 percent.
Fitch Ratings issued a statement that said it affirmed its ratings in Genworth as Stable. The senior debt rating is “A” and the capital securities rating is “A-minus.”