US insurer Genworth Financial has cut its ties with Genworth Mortgage Insurance Australia, selling its 53 per cent stake.

The sale of 214 million shares was handled through an underwritten bookbuild to a range of institutional investors.

A GMIA spokesperson said the company would not know who its new shareholders are until disclosure statements were issued. Settlement of the sale is on March 3.

The sale price was A$2.28 a share. More than half of the proceeds will be used to pay a US$247 million promissory note to AXA.

As a result of the sale, Genworth Financial nominees on the GMIA board, Rajinder Singh and Stuart Take, will step down. All other current directors remain on the board.

All rights and obligations under a shareholder agreement between the companies will cease 90 days after the settlement of the share sale, subject to limited residual rights to allow Genworth Financial to prepare financial statements and meet regulatory obligations.

Other commercial arrangements will also cease after a transition period. These include a trademark licensing agreement, IT services agreement and shared services agreement.

GMIA is independently capitalised and the sale has no balance sheet implications. It reported a loss $107.6 million for the 12 months to December, largely due to the company’s decision to strengthen reserves and also lower returns on invested funds.

Gross written premium increased by 29.7 per cent compared with the previous year to $561.7 million and net earned premium increased by 4.6 per cent to $312 million.