Prudential PLC (LON:PRU) said it now expects the demerger of its US arm Jackson Life to take place later this year than previously anticipated.

The insurance giant had been targeting a demerger in the second quarter of this year but now says the separation will take place in the second half of 2021, subject to regulatory and shareholder approvals.

In a statement issued ahead of its annual general meeting, the Pru said it is still considering raising equity of US$2.5bn-US$3bn following the completion of the demerger to enhance financial flexibility and bolster its balance sheet.

Its preferred means of raising new funds is a fully marketed global offering to institutional investors concurrent with a public offering in Hong Kong to retail investors.

“The US demerger will complete Prudential’s structural transformation into a business solely focused on the growth opportunities of Asia and Africa,” said Prudential’s chief executive officer (CEO), Mike Wells.

“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. As part of this potential raise, Prudential will also consider a possible preferential offering to Hong Kong resident eligible employees and agents,” Wells said.

The company said its Asia and Africa business generated annual premium equivalent (APE) sales of US$1,193mln in the first quarter of 2021, up 14% on the same period of 2020. New business profit was up 21% to US$624mln.

Excluding Hong Kong, where restrictions continue to hit cross-border business with the Chinese mainland, APE sales were up 35% and new business profit was up 64% year-on-year.

Shares in the Pru were down 5.4% at 1,443p in mid-morning trading.

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