Prudential PLC Mulls $2.5 Billion-$3.0 Billion Equity Raise; 2020 Pretax Profit Rises -- Update
--Prudential said 2020 earnings were boosted by Asia, offsetting
a fall in the U.S.
--The Jackson spinoff is expected to complete in the second
--The company declared a second interim dividend of 10.73 cents
By Ian Walker
Prudential PLC said Wednesday that it is considering an equity
raising of $2.5 billion to $3 billion once the demerger of its U.S.
business has completed, as it reported a 9.3% rise in net profit
The insurance-and-investment business said any equity raising
will be through a global offering to institutional and Hong Kong
retail investors. The extra funds will boost the company's
financial flexibility and de-lever its balance sheet.
"As an Asia-focused company, the group believes there are clear
benefits from increasing both its Asian shareholder base and the
liquidity of its shares in Hong Kong. The allocation of any
offering will take into account a number of criteria including the
interests of existing shareholders," Chief Executive Mike Wells
Prudential expects to complete the demerger of Jackson Financial
Inc. in the second quarter of this year. The company previously
said it plans to spin off the U.S. business in the second quarter
of this year and list it on the New York Stock Exchange.
"The proposed demerger [of Jackson] will complete Prudential's
structural shift from a diversified global group to a growth
business focusing exclusively on the unmet health, financial
protection and savings needs of people in Asia and Africa," Mr.
Under the demerger shares in Jackson will be distributed to
Prudential shareholders, although no terms have been disclosed yet.
Prudential expects to own a 19.9% shareholding in Jackson after it
lists, which it plans to sell over time.
Prudential made an IFRS net profit from continuing operations of
$2.12 billion for the year ended Dec. 31, compared with $1.94
billion for 2019.
Adjusted operating profit--one of the company's preferred
metrics, which strips out exceptional and other one-off items--was
$5.51 billion compared with $5.31 billion. Prudential said the rise
reflects the continued growth of its Asia businesses, offset by
lower U.S. profits.
Asia adjusted operating profit rose to $3.67 billion from $3.28
billion, while U.S. operating profit fell to $2.80 billion from
Group LCSM shareholder surplus--a key measure of balance-sheet
strength--was estimated at $11.0 billion, equivalent to a ratio of
328%, compared with a ratio of 309% at Dec. 31, 2019. Local capital
summation method, or LCSM, has been agreed with the Hong Kong
Insurance Authority, Prudential said.
Gross premiums earned were $42.52 billion compared with $45.06
billion a year earlier.
The board declared a dividend of 10.73 cents a share, taking the
total payout to 16.10 cents.
Shares in London at 0925 GMT were up 15.5 pence, or 1%, at
Write to Ian Walker at firstname.lastname@example.org
(END) Dow Jones Newswires
March 03, 2021 04:49 ET (09:49 GMT)
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