LONDON, (The Southern African Times) – Prudential is planning to raise up to $2.9bn in Hong Kong to pay off debt and invest in Africa and Asia, having completed an overhaul of its operations with the demerger of its US business this month.
The life insurer said it intended to sell about 130.8m shares on the Hong Kong stock exchange, as much as a quarter of it through a public share offering. The company has said in the past that it wants more investors in Asia.
The group, which has primary listings in London and Hong Kong, said that $2.25bn of the equity issue would go towards paying off high-interest debt. The remainder would be spent, it said, “to maintain and enhance Prudential’s financial flexibility in light of the breadth of opportunities to invest for growth in Asia and Africa”.
The company’s shares had fallen 8 per cent by midday trading in London, against a less than 2 per cent fall in the FTSE 100.
Prudential said the investment in growth would give it the capacity to serve 50m customers by 2025. By the end of June, it had 17m customers in Asia and Africa.
The fundraising, which the company announced in January, comes at the end of a prolonged restructuring. Prudential demerged its UK business two years ago and spun off its US business, Jackson, this month through a listing on the New York Stock Exchange.
It has been encouraged in the effort by US activist investor Third Point, which also wants it to eliminate its UK head office. The group said it had no intention of doing so, citing its “key stakeholders” in London.
Prudential expects to price the placing and public offer around September 25, but there is a ceiling for the public offer price of HK$172 ($22.09).
In a business update alongside the offering details, Prudential highlighted that Covid restrictions remained in place in many of its key Asian markets, and said the varied pace and effect of vaccine rollouts made the economic recovery there — and the knock-on effect on group performance — hard to predict.
“There is also continuing uncertainty over the extent and the timing of the reopening of the border between Hong Kong and mainland China and we expect that it will remain closed at least for the rest of this year,” Prudential said.
This has prompted a shift to digital communication. Almost half of all Asia sales in the second quarter were through agents operating online.
