StockMarketWire.com - Insurance giant Prudential announced an up to HK$ 22.49 billion ($2.89 billion) capital raising in Hong Kong that it said would cut debt and provide additional financial flexibility.

Prudential said it would raise up to 5% of its issued share capital, or up to about 130.8 million shares, on the Hong Kong Stock Exchange through a public offer and international placing.

It had entered into a Hong Kong public offer underwriting agreement that included a maximum offer price of HK$172 per share.

'The proceeds of the share offer are expected to maintain and enhance Prudential's financial flexibility in light of the breadth of opportunities to invest for growth in Asia and Africa,' the company said.

More specifically, it said US$2.25 billion was expected to be used to redeem existing high-coupon debt.

The remaining net proceeds were expected to contribute to Prudential's central stock of liquidity, in order to further increase financial flexibility, it added.

The company had last month indicated that it was mulling a capital raising following the demerger of its US business, Jackson Financial, which was completed on 13 September.

Story provided by StockMarketWire.com