UK insurer Prudential sets pricing in US$2.4 billion Hong Kong stock placement
- UK insurer priced 130.8 million shares at a 2.6 per cent discount to its Hong Kong closing price on Friday
- Stock offering comes days after insurer spun off its US unit Jackson Financial in a demerger exercise
Prudential, the biggest UK insurer by market value, said it expects to raise HK$18.5 billion (US$2.4 billion) from a share placement in Hong Kong to repay older debt and fund its global expansion.
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Most of the proceeds – US$2.25 billion – are expected to be used to redeem existing high coupon debt within six months, the company said. Its nearest maturity bond is a £300 million (US$410 million) 6.875 per cent note due in January 2023. The remainder will be used to “further increase Prudential’s financial flexibility.”
Some 6.5 million of the placement shares are being offered to retail investors in Hong Kong, though that tranche could be increased depending on demand. The stock has risen 3.1 per cent in the city this year, compared with a 9 per cent decline in Asia rival AIA Group.
Prudential said it would make a further announcement regarding the level of indications of interest in the placing, as well as the level of applications in the retail offering on Thursday. The new shares are expected to begin trading on October 4.
The share placement by Prudential is one of the biggest follow-on offerings in Hong Kong this year and comes as a crackdown on the tech sector in China has cast a pall on listings recently.
Prudential, via a 50 per cent owned-joint venture with Citic, has 20 branches covering 99 cities in mainland China. Its China business reported a profit of US$394 million in 2020, a 47 per cent increase over the prior year, according to its prospectus.