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Prudential Raises $2.4 Billion From Hong Kong Offering

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(Bloomberg) -- Prudential Plc has raised HK$18.8 billion ($2.4 billion) from its Hong Kong share offering after pricing the stock at a slight discount to its last close in London.

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The London-based insurer sold 130.8 million shares at HK$143.80 apiece, it said in a statement on Saturday. Prudential plans to use proceeds from the offering to redeem existing high coupon debt, with the balance to contribute to investments in Asia and Africa, where Group Chief Executive Mike Wells has said the company will be “entirely focused on long-term structural growth opportunities.”

The price represents a discount of 2.9% on the stock’s last close of 13.92 pounds in London. The firm said in a statement to the Hong Kong stock exchange that dealings in the offer shares would commence on Oct. 4, subject to approval.

The offering comes just over a week 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 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.

Regulatory Clampdown

Prudential’s share sale is one of Hong Kong’s largest additional offerings of stock this year, giving a boost to a market that has been hit by China’s regulatory clampdown. Executive Director James Turner said earlier this month that the regulatory direction is favorable, as it moves to improve the quality of protection products that are sold to its customers.

The company has been open about its interest in increasing its stake in its China joint venture because of the rapid growth, Turner said.

Citigroup Inc., Goldman Sachs Group Inc., CLSA Ltd. and HSBC Holdings Plc are joint global coordinators for the offering. Bank of America Corp., Credit Suisse Group AG, UBS Group AG and UOB Kay Hian are acting as joint bookrunners.

(Corrects the first paragraph in story published Sunday to show that the discount is to London close, not Hong Kong; also corrects discount figure in the third paragraph.)

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