Lenovo to Raise $2B via Convertible Bonds to Saudi Wealth Fund
Lenovo Group Ltd. has entered an agreement to issue $2 billion worth of zero-coupon convertible bonds to Alat, a unit of Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF). The bonds, which will be interest-free and repayable in three years, are convertible at an initial price of HK$10.42 per share. This price represents a discount of approximately 12% from Lenovo's closing share price. The proceeds from the bonds will be used for repaying debt and funding general corporate purposes.
In conjunction with the bond issuance, Lenovo plans to establish a regional headquarters and a manufacturing facility in Saudi Arabia, enhancing its presence in the Middle East. This strategic collaboration aims to support Lenovo's global expansion and geographic diversification of its manufacturing footprint. Following the announcement, Lenovo's shares experienced a decline, falling as much as 6% before recovering slightly to close down 2.5% at HK$11.52. This move is part of Lenovo's broader strategy to strengthen its market position and foster innovation, similar to recent actions by other major companies in the region.
