Prudential has secured a last-minute deal with the UK regulator to salvage its takeover of AIG’s Asian life insurance unit.

UK media reports say the London-based company has agreed to set aside £1 billion ($1.6 billion) to fund a backstop and will modify its plan to fund the purchase to alleviate solvency concerns expressed by the Financial Services Authority (FSA).

The deal will allow the company to proceed with a $US21 billion ($23.3 billion) rights issue to largely fund the $US35.5 billion ($39.4 billion) takeover.

No official announcement has been made by the FSA or Prudential.

Prudential has not amended its May 27 deadline by which shareholders must vote on the deal.

In an announcement earlier this month, the company said it would delay the pricing and launch of the rights issue upon completing negotiations with the FSA.