Prudential 'looking to raise extra $1.5bn for AIG Asian unit buyout'

10 May 2010

British insurance company Prudential is seeking to raise around £1 billion ($1.5 billion) in additional capital as part of an attempt to help fund a proposed buy-out of American International Group's (AIG) Asian division, an insider has stated.

The source told Bloomberg that Prudential hopes the extra money will mean the Financial Services Authority in the UK gives its approval to the deal.

Last week, Prudential put back a planned $21 billion rights offering after the British regulatory body asked the firm to increase its capital levels.

Prudential also needs the approval of three-quarters of its investors for the AIG deal to go through.

Earlier this year, AIG and Prudential provisionally agreed that the takeover would take place for a fee of $35.5 billion.

AIG intends to use the money raised from the agreement to help repay some of its debt owed to the Federal Reserve Bank of New York.

By Asim Shah

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