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Note to employees:
Genworth Colleagues,
Today, we announced that Oceanwide has reached a general agreement with Hony Capital on the key commercial terms and conditions of its $1.8 billion offshore financing plan, as well as provided satisfactory information regarding its plan for the portion of the funds from Mainland China. This is great progress toward closing the transaction; however, the logistical challenges of doing business in a pandemic are lengthening the time it takes to wrap up the final details on the offshore portion. To that end, we also announced that we’ve agreed to a 16th waiver and agreement, extending the previous September 30 deadline to no later than November 30, 2020 and including a provision for an interim checkpoint on October 31, 2020, by which time Oceanwide needs to provide satisfactory evidence that the necessary funding will be available to close the transaction by November 30.
I realize this may seem like a long extension, especially when we’re so close to completing all the steps we need to close. We decided on November 30 for a few reasons. First, business culture across Asia prioritizes relationships and the face-to-face interactions that make for clear communication and understanding—and the COVID travel protocols for both Hong Kong and Mainland China are making those interactions difficult. Both places require mandatory 14-day quarantines upon entering, which has delayed—and will continue to delay—the in-person discussions needed to wrap up these last few steps. Second, the Chinese Mid-Autumn festival begins today, which is a national week-long holiday to gather with family and give thanks. While travel for the holiday will be limited with the COVID restrictions, it will still be a time when the business sector shuts down and people focus on celebrating with family, like Thanksgiving in the US.
Many of our colleagues have been working very hard over the past several weeks to either prepare the company to close the transaction or address our near-term liabilities, so I know this extension may be disappointing. We’ve checked a lot of items off our list in that time, though, including a USMI debt issuance and FINRA’s OK to close prior to receiving their final approval, not to mention countless tasks and preparations we need to complete prior to close. We may not be closing this week, but we’re in both a better financial and closing position thanks to your efforts. Your commitment to Genworth has been evident throughout the past four years of this process, but I’m especially grateful for your focused execution and tireless spirit as we work through these last few milestones.
Thank you again for your patience as we await Oceanwide’s completion of the transaction funding process. We’re very close, and I’ll be back with an update when I can.