The California-based PMI Group announced that it has completed the sale of its Australian mortgage insurance subsidiary and related Australian holding company to QBE Insurance Group Limited.
“The aggregate sale price is U.S. $920 million, 80 percent payable in cash and 20 percent payable in the form of a note issued by QBE,” said the bulletin. “This transaction enhances PMI’s overall liquidity and supports its U.S. mortgage insurance operations.”
PMI added that the note “matures and is payable in September 2011, and the actual amount payable on the note could be reduced to the extent that the performance of PMI Australia’s existing insurance portfolio as of June 30, 2008 does not achieve specified targets.”
PMI said it expects to classify PMI Australia as a “held for sale entity” for the third quarter of 2008. “Accordingly, the Company expects to recognize all sale expenses, any SFAS 115 unrealized gains or losses and accumulated currency translation gains and losses in other comprehensive income in the third quarter of 2008.
Additionally, net income from PMI Australia for the third quarter and prior reported periods will be reclassified as discontinued operations in the financial results reported for the period ended September 30, 2008.”
Source: The PMI Group – http://www.pmigroup.com
Topics Australia
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