Prudential plans to raise US$2.4b from HK offering

Hong Kong

PRUDENTIAL plans to raise as much as US$2.4 billion from its Hong Kong share offering after pricing the stock at a slight discount to its last close in Hong Kong.

The London-based insurer is selling up to 130.8 million shares at HK$143.80 (S$25) apiece, it said in a statement last Saturday. Prudential plans to use proceeds from the offering to redeem existing high coupon debt, with the balance to contribute to investments in Asia and Africa, where group chief executive Mike Wells has said the company will be "entirely focused on long-term structural growth opportunities".

The prospective price represents a discount of 2.6 per cent on the stock's last close in Hong Kong. The company said in a statement to the Hong Kong stock exchange that dealings in the offer shares would commence on Oct 4, subject to approval. The offering comes just over a week after Prudential completed the demerger of its US unit, Jackson Financial Inc, a move that may accelerate its competition with pan-Asia life insurer rival AIA Group.

The insurance conglomerate, already a leading player in South-east Asian markets except Thailand, will face off more fiercely with AIA in China, which is the world's most populous nation and has a growing middle-class.

Prudential's share sale is one of Hong Kong's largest additional offerings of stock this year, giving a boost to a market that has been hit by China's regulatory clampdown.

Executive director James Turner said last week that the regulatory direction is favourable, as it moves to improve the quality of protection of products that are sold to its customers. The company has been open about its interest in increasing its stake in its China joint venture because of the rapid growth, Mr Turner said.

Citigroup, Goldman Sachs Group, CLSA and HSBC Holdings are joint global coordinators for the offering. Bank of America, Credit Suisse Group, UBS Group and UOB Kay Hian are acting as joint bookrunners. BLOOMBERG