The proposed legal entity reorganization will involve: (1) the creation of a new holding company (New Parent) over Genworth; (2) Genworth becoming a direct, wholly-owned subsidiary of New Parent; (3) the existing Genworth stock automatically converting into shares of New Parent stock and Genworth stockholders becoming stockholders of New Parent; and (4) the U.S. mortgage insurance subsidiaries, including the European mortgage insurance subsidiaries, becoming wholly-owned subsidiaries of New Parent rather than the old parent, Genworth. Following completion of the reorganization, Genworth, the old parent, will continue to own its existing businesses except the U.S. mortgage insurance subsidiaries and New Parent will own the U.S. mortgage insurance subsidiaries and Genworth, the old parent. In addition, Genworth's outstanding senior and subordinated notes will remain obligations of Genworth, the old parent, and will receive the benefit of a new unconditional guarantee by New Parent of those obligations and thereby will continue to benefit from the value of the U.S. mortgage insurance subsidiaries. In connection with the reorganization, New Parent will be renamed Genworth Financial, Inc., the shares of New Parent common stock to be issued in connection with the reorganization will have the same designations, rights, powers and preferences, qualifications, limitations and restrictions as the current outstanding Genworth common stock. New Parent common stock will be listed on The New York Stock Exchange and trade under the symbol "GNW," and the company expects Genworth stockholders will not recognize any gain or loss for U.S. federal income tax purposes in connection with the reorganization.
No vote or consent of, or other action, by Genworth's stockholders or noteholders is required for the proposed reorganization. The reorganization plans are subject to approval by various regulators and are currently being pursued. The plans have been approved by GMICO's domestic regulator, the North Carolina Department of Insurance. The company anticipates completing the reorganization in the second quarter of 2013.
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