U.K.'s Prudential Delays $20B Rights Issue

The U.K. insurer delayed a $20 billion rights issue related to its acquisition of AIG's Asian unit as it continues discussions with U.K. regulators over its capital position.
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LONDON (

TheStreet

) --

Prudential PLC

(PUK) - Get Report

has delayed a $20 billion rights issue related to its acquisition of

AIG's

(AIG) - Get Report

Asian unit as it continues discussions with U.K. regulators over its capital position.

"Prudential is in continuing discussion with the Financial Services Authority regarding the transaction, in particular in relation to the capital position of the Enlarged Group under the Insurance Groups Directive," the U.K. insurer said in a press release Wednesday.

The $20 billion rights issue will go toward the $35.5 billion acquisition of AIG's Asian unit, AIA Group.

Prudential said it has decided to delay the pricing and launch of the rights issue while it seeks to conclude its talks with the FSA. Once those talks are concluded, Prudential said it would price and launch the rights issue.

Prudential had said previously it expects the AIA transaction to close in the third quarter. It said Wednesday it didn't expect the FSA talks to affect that timing.

"We are entirely committed to the transaction and remain on track to complete within the timing set out on 1 March," said Prudential Chairman Harvey McGrath, in a statement. "The work completed since 1 March with the AIA and Prudential teams has convinced me more than ever that the enlarged Group will be in a position to capture sustainable and highly profitable growth and will deliver substantial long-term value for our shareholders."

-- Reported by Joseph Woelfel in New York.

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