Lenovo partners with Saudi Arabia's sovereign wealth fund in USD2B investment deal
Date
5/29/2024 5:06:27 AM
(MENAFN) Lenovo, the leading global manufacturer of personal computers, has entered into a significant investment agreement with Saudi Arabia's sovereign wealth fund, Alat, marking a strategic move to bolster the kingdom's technological aspirations. Under the agreement announced on Tuesday, Lenovo will issue USD2 billion in convertible bonds to Alat, facilitating a broad investment initiative aimed at advancing the kingdom's technology sector.
As part of the deal, Lenovo will establish its Middle East and Africa headquarters in Riyadh, alongside a dedicated research and development center, underscoring the growing trend of global companies establishing strategic footholds in Saudi Arabia. Furthermore, the kingdom will host a new manufacturing plant for PCs and servers, adding to Lenovo's extensive global manufacturing network, which already comprises over 30 factories worldwide.
The partnership with Alat presents Lenovo with a unique opportunity to leverage substantial resources and financial flexibility to accelerate its business transformation and capitalize on the burgeoning growth momentum in the Middle East and Africa region, according to Yuanqing Yang, Chairman and CEO of Lenovo.
Proceeds from the issuance of convertible bonds will be utilized by Lenovo to retire existing debt and bolster working capital. The bonds, which mature in three years, will be convertible into equity at maturity, with an initial conversion price set at 10.42 Hong Kong dollars (USD1.33) per share. Notably, the bonds will be zero-coupon instruments, meaning they will not accrue interest during their tenure, offering investors potential profits upon maturity based on the face value.
This strategic collaboration between Lenovo and Alat signifies a significant step forward in advancing Saudi Arabia's technological ambitions while positioning Lenovo for sustained growth and expansion in the dynamic Middle East and Africa market.
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