Conseco Inc. has secured a $78 million investment from a hedge fund, and will sell additional stock and bonds, in a bid to clear up the Carmel-based insurer's financial uncertainties.

Paulson & Co., a private investment firm based in New York, will acquire 16.4 million shares, with warrants to obtain another 5 million shares. Combined with shares Paulson already owns, Paulson will control 9.9 percent of the company.

Conseco plans to sell $200 million of common stock in a secondary offering and sell $293 million in new bonds. Conseco hopes to complete the transactions by March.

The moves will allow the Conseco to pay off $293 million in bonds that Conseco might have been forced to convert into cash in September 2010.

Conseco didn't have the cash for such an event, a concern that has kept analysts and investors on the sidelines about Conseco's stock.

But after today's announcements, made after the markets closed, Conseco's shares shot up 14 percent to $5.69 apiece in after-hours trading.

Earlier this year, Conseco survived a brush with financial disaster after its public accounting firm threatened to issue a warning about Conseco's ability to stay in business. Conseco risked breaching its bank agreements because the value of its investment assets had plunged in the global financial crisis.

Conseco successfully renegotiated its lending agreements, agreeing to pay higher interest in exchange for looser restrictions.

The company's stock has surged since then, but some investors have remained concerned, citing the convertible bonds that could come due in September.