UK insurer Prudential plans to raise almost US$3 billion in stock placement in Hong Kong

Prudential said it will use the proceeds to strengthen its ‘financial flexibility’
The insurance company said it will sell roughly 130.8 million shares on the city’s stock exchange at an offer price of no more than HK$172 per share

Insurance

Zhang Shidongin Shanghai

Published: 8:53pm, 19 Sep 2021

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Prudential, the UK-based insurer, plans to raise about HK$22.5 billion (US$2.9 billion) from a share placement in Hong Kong, as a global roll-out of Covid-19 vaccinations improves its growth outlook.

The insurance company will sell roughly 130.8 million shares on the city’s stock exchange at an offer price of no more than HK$172 per share, Prudential said in a statement. The placement represents at most 5 per cent of the company’s outstanding shares, it said.

Some 6.5 million of the placement shares will be offered only to local investors in Hong Kong, though that tranche may be increased to 32.7 million shares, or a quarter of the total, depending on demand and the clawback mechanism, according to the statement.

Prudential said it will use the proceeds to strengthen its “financial flexibility”. Some US$2.25 billion will be used to redeem existing high-coupon debt, with the remaining net proceeds expected to contribute to Prudential’s central stock of liquidity.

“Prudential is now entirely focused on long-term structural growth opportunities in Asia and Africa. This share offer will maintain and enhance Prudential’s financial flexibility in light of the breadth of opportunities to invest for growth,” said Mike Wells, chief executive of Prudential. “As we undertake the next stage of Prudential’s development, we strive to deliver profitable growth in a socially responsible way, digitise our products and services, and humanise our company and advice channels.”

The final offer price will probably be determined on Saturday, and the new shares are expected to start trading on October 4, the statement said.

Prudential has branches covering 99 cities in mainland China.

The company’s share price rose 0.8 per cent to HK$157.80 on Thursday before being suspended on Friday. It has gained 9.7 per cent so far this year, outperforming an 8.5 per cent decline on the Hang Seng Index.

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