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London, May 17 (PTI) British insurer Prudential Plc today said it will raise nearly 14.5 billion pounds (about USD 21 billion) through issue of new shares, to primarily fund its proposed multi-billion takeover of Asian entity AIA Group. The announcement of the rights issue was to come on May 5 but the insurer had to delay the release of the details of the issue after UK regulator Financial Services Authority (FSA) raised concerns over the capital reserves of the company. In a statement, Prudential said it is announcing "further details of the proposed combination of the Prudential Group and the AIA Group, including terms of its fully underwritten rights issue to raise approximately 14.5 billion pounds". Prudential in March revealed that it would acquire AIA Group, the Asian arm of battered American insurer AIG, in a deal valued at USD 35.5 billion. "The rights issue will be made on the basis of 11 rights issue shares for every two existing shares at an issue price of 104 pence per share (11.78 Hong Kong dollars for Hong Kong and Singapore shareholders)," Prudential said. According to the company, issue price represents an 80.8 per cent discount to closing price of 542.5 pence on May 14. "We believe that this transaction offers compelling strategic and financial benefits and will deliver excellent returns for shareholders. "We are creating the leading life insurer in the fastest growing region in the world, giving us greater exposure to the highly attractive long-term growth offered in Asia," Prudential''s chairman Harvey McGrath said. Prudential''s group CEO Tidjane Thiam said the combined business would be a fast growing and highly profitable firm, with a leading position in most attractive markets worldwide. The general meeting of shareholders for seeking approval for the rights issue, among others, would be held on June 7. PTI RAM.
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