Q+A: How would Pru's Asia listing work?

HONG KONG, April 27 (Reuters) - British insurer Prudential Plc (PRU.L), which launched a $35.5 billion takeover of American International Group Inc's (AIG.N) Asian life insurance business, aims to list in Hong Kong and Singapore on May 11.

The listings are aimed at drawing Asian investors to Prudential's $21 billion rights offering, which will play a major role in funding the purchase of American International Assurance (AIA).

The listings show the importance of Asia to Pru's growth going forward.

Standard Chartered Bank (STAN.L)(2888.HK) and HSBC Holdings (HSBA.L) (0005.HK) are two other examples of companies that have taken the London-to-Hong Kong listing route. However, listing by introduction is not so common.

Here is how the process works.

WHAT IS LISTING BY INTRODUCTION?

Unlike a conventional stock market float, listing by introduction does not involve raising new capital. It's a process by which shares of a company, already trading on a stock exchange, are made available for trading on another exchange.

HOW DOES TRANSFER OF SHARES HAPPEN?

To start with, some of Prudential's UK shareholders would apply to the company to shift their shares to Hong Kong. To make that easier, Prudential has set up an express shunting process whereby the shares will be transferred to Pru's Hong Kong registrar within three days. That kind of transfer normally takes about 11 days.

Credit Suisse, the sole sponsor, along with HSBC and JP Morgan Cazenove, will be responsible for providing liquidity on the Hong Kong and Singapore exchanges. Providing ample liquidity was among the conditions both exchanges prescribed to allow the listings. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

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WHEN WOULD TRANSFER OF SHARES BEGIN?

The transfer of shares will be completed in five batches, with the first set to arrive on May 7. The three brokers involved in the process have arrived at an undisclosed amount of shares that will be transferred from London to have a deep pool of shares available for orderly trade.

IS THERE A COST INVOLVED IN THE TRANSFER OF SHARES?

There is a nominal cost attached to the transfer, which will be absorbed by the company in the first month.

WHY WOULD INVESTORS WANT TO SHIFT SHARES TO HK/SINGAPORE?

There are several Asia-focused funds that have bought the London shares with a view to transfer to Hong Kong ahead of the rights offer. Some analysts expect the Hong Kong shares to trade at a premium initially, though in the long-run the arbitrage will disappear as the shares are fully fungible.

WHAT WILL PRU'S HK SHARES START TRADING AT?

The opening level of Prudential's Hong Kong shares will be determined by their London close on May 10. Theoretically, the opening level of the Hong Kong shares will be the Monday close in London multiplied by the conversion rate.

HOW MUCH OF PRU'S UK SHARES ARE LIKELY TO MOVE TO HK?

Analysts estimate that about a third of Prudential's total market capitalisation will migrate to Hong Kong and Singapore over the next three years. That is based on expectations that an enlarged Prudential will drive a good part of the business from Asia.

WILL PRU BE PART OF THE HK BENCHMARK INDEX?

Prudential's Hong Kong shares will not be a member of the local benchmark index right away. But, as more shares migrate to Hong Kong, the stock could be added to the main index over time. (Reporting by Denny Thomas and Kennix Chim;