Prudential Plc plans to raise up to the equivalent of US$2.89 billion in a new share offering in Hong Kong as the insurance giant eyes long-term growth opportunities in Asia and Africa.
Prudential intends to offer as many as about 130.8 million shares, or up to 5% of its issued share capital, on the Hong Kong stock exchange through a concurrent public offer and international placing to increase its Asian shareholder base, it said in a statement on Saturday.
The new shares will be offered at a maximum of HK$172 apiece and will be traded in Hong Kong on Oct. 4. Pricing is expected on Sept. 25, the company said.
Prudential plans to use US$2.25 billion of the sale proceeds to redeem existing high coupon debt, with the balance to contribute to investments in Asia and Africa, where Group Chief Executive Mike Wells said the company will be “entirely focused on long-term structural growth opportunities.”
The offering comes days after Prudential completed the demerger of its U.S. unit, Jackson Financial Inc, a move that may accelerate its competition with pan-Asia life insurer rival AIA Group. The London-based insurance conglomerate, already a leading player in Southeast 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.
Building Capacity
The company is building capacity to serve 50 million customers by 2025, Executive Director James Turner said at a briefing in Hong Kong on Sunday. The company currently has more than 17 million life customers in the two regions.
While the tide is shifting for many companies in China as President Xi Jinping calls for “common prosperity” and reins in the country’s private-sector players, Prudential believes the regulatory direction as favorable.
“One thing that we noticed is that all of these regulations are starting to come towards our business model,” said Turner. “What we see is regulation to improve the quality of protection products that are sold to our customers. This is a positive thing for our customers and indeed for our business.”
The company has been open about its interest in increasing its stake in its China joint venture because of the rapid growth, Turner said.
Prudential has hired Citigroup Inc., Goldman Sachs Group Inc., CLSA Ltd., HSBC Holdings Plc, BofA Securities, Credit Suisse Group AG, UBS Group AG and UOB Kay Hian as joint bookrunners for the share sale. Rothschild & Co is financial adviser to the company for the deal.
