This photo dated March 9, 2010 shows an advertising board for British insurer Prudential on the top of a building on the Kowloon peninsula in Hong Kong. (MIKE CLARKE / AFP)

Prudential plc, the London-based insurer and asset manager, said Monday that it is issuing 130.8 million shares in the Hong Kong Special Administrative Region to help boost its financial flexibility.

Based on the closing price of the shares on the stock exchange of HK$162.40 (US$20.85) per offer share, Prudential, which has the bulk of its staff in Hong Kong, could raise about HK$20.85 billion.

Most of the net proceeds of about HK$17.50 billion are expected to be used to redeem existing high coupon debt within six months. The remainder of about HK$3.34 billion is expected to contribute to Prudential’s liquidity.

The public offer of 6.5 million shares, which opens for subscription today, will be priced at a maximum HK$172 per share. This offer accounts for 5 percent of the pan-Asian insurer’s issued share capital.

Most of the net proceeds of about HK$17.50 billion are expected to be used to redeem existing high coupon debt within six months. The remainder of about HK$3.34 billion is expected to contribute to Prudential’s liquidity

The public offer price and the international placing offer price would be set on or around Sept 25, Prudential said. Its international placing is 124.24 million shares.

Prudential plc has dual primary listings in Hong Kong and Singapore. Its primary listing is in London and is jointly-headquartered in Hong Kong and London. The insurer also has a joint-venture in the Chinese mainland.

Prudential Group is led by Group Chief Executive Mike Wells, while Prudential Hong Kong Limited is led by Chief Executive Officer Derek Yeung.

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Prudential said in the filing that the public portion of the offer may be upsized to about 32.7 million shares. This includes a preferential offer of about 1.3 million shares to eligible employees and agents.

The offer closes on Sept 24 and application results will be announced on Sept 30.

Prudential’s pan-Asia asset manager, Eastspring, manages US$254 billion in assets in 11 markets as of June 30, 2021.

Prudential said in the filing that the public portion of the offer may be upsized to about 32.7 million shares. This includes a preferential offer of about 1.3 million shares to eligible employees and agents

In the 10 years to 2020, embedded value in Asia increased on average by 14 percent a year from US$12.4 billion to US$44.2 billion, the Prudential filing showed. 

In Asia, new business profit grew by 8 percent on average from US$1 billion to US$2.20 billion, and adjusted operating profit grew by 15 percent a year US$895 million to US$3.66 billion, in the decade to 2021.  Post-tax profit in Asia grew by 14 percent a year on average from US$932 million to US$3.38 billion.

In Hong Kong, new business profit in 2020 was US$787 million, while after-tax profit was US$994 million.

Prudential provides critical illness, medical benefits and life insurance, as well as investment products in Hong Kong.

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The group, founded in London in 1841, has trusted brands, digital multi-channel distribution and differentiates its insurance and asset management products and services.

Citi, Goldman Sachs, CLSA Limited and HSBC are joint global coordinators and joint bookrunners. BofA Securities, Credit Suisse, UBS and UOB Kay Hian are also joint bookrunners. Rothschild & Co is financial adviser.