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[lenovo group will issue $2 billion of convertible bonds to alat, and the net proceeds will be used to repay the company's existing debts and supplement working capital and general corporate purposes.]

on september 12, lenovo group announced at a shareholders' meeting in hong kong that the resolution related to the strategic investment transaction announced in may 2024 had been approved by the shareholders' meeting, approving the issuance of $2 billion of interest-free convertible bonds and 1.15 billion warrants to alat. lenovo's closing price rose 1% to hk$9.09 yesterday.

according to the previous bond subscription agreement, lenovo group will issue $2 billion of convertible bonds to alat, and the net proceeds will be used to repay the company's existing debts and supplement operating funds and general corporate purposes. the convertible bonds will mature three years after issuance and can be converted into equity at the initial conversion price of hk$10.42 per share at maturity. as a long-term shareholder, alat is willing to convert the interest-free convertible bonds into shares after three years, which will save lenovo group about $100 million in interest expenses each year in the next three years and will not be affected by the dilution of convertible bonds.

alat is a wholly-owned subsidiary of the public investment fund (pif) of the kingdom of saudi arabia. according to the cooperation agreement, lenovo group will set up a regional headquarters for the middle east and africa market in riyadh, including a customer center and a research and development center for the region. lenovo group will also build a new pc and server manufacturing base in saudi arabia to further expand its global manufacturing layout.

not long ago, lenovo group cfo huang weiming disclosed the story behind the transaction to china business news. about 10 months ago, lenovo executives went to the middle east, and a series of investment banks introduced lenovo, focusing on two aspects: first, the other party introduced a lot of local large institutions, because many middle eastern funds hope to find high-quality companies to invest; second, lenovo is also taking this opportunity to find strategic partners to help the development of the middle east market, and met with seven or eight investors. in the end, lenovo and alat came together. he said that alat agreed with lenovo's strategy, and alat's sovereign fund is a shareholder of many large saudi companies, through which lenovo can reach customers faster.