Prudential announces rights issue as sales raise £807 million
17 May 2010 / by Lois Avery
Prudential has announced plans to raise an extra £14.5 billion by allowing shareholders to buy more shares at a cut price.
The Rights Issue, which is thought to be the UK’s biggest to date, will offer shares at 104p, a discount of 80 per cent to Friday’s closing price of 542½p. It is thought that this extra revenue will help the insurer raise cash to fund the planned acquisition of AIG Group.
The merger will see Prudential’s business double in size and the announcement comes just as Prudential release their quarterly statement detailing group-wide sales of £807 million, an increase of 26 per cent on this time last year.
New business profit is also up 27 per cent after the company reported ‘outstanding’ performance in its Asia market and sales are up 30 per cent.
In the UK Prudential, one of the largest pension providers, continued to provide well in the retirement savings and income market increasing its overall volume. New business in the pensions sector was up 15 per cent pulling in a £69 million profit. Individual annuity sales were also marginally higher than this time last year.
Group chief executive Tidjane Thiam, said: “Our record performance in 2009 continued into the first quarter of 2010. We maintained our focus of allocating capital to the most profitable opportunities, and as a result have delivered strong growth in new business profit.
“In 2010 we said that we would accelerate our proven strategy to capitalise on the most profitable growth opportunities in our chosen markets and these strong results demonstrate we are delivering on that objective. Going forward, we expect momentum in Asia to continue, whilst the economic conditions in the UK and the US stabilise.”
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