- Collaboration to speed up Lenovo’s ongoing transformation, additional improve international presence, and enhance geographic diversification of world manufacturing footprint
- Lenovo to catalyze Center East and Africa (MEA) growth with Alat partnership and capitalize on the area’s sturdy IT and Enterprise Companies trade development momentum
- Funding to offer Lenovo with higher monetary flexibility to energy future development
29 Might, 2024 – Lenovo Group Restricted (HKSE: 992) (ADR: LNVGY) introduced that it has signed a Strategic Collaboration Framework Settlement (“Strategic Collaboration”) and a Bond Subscription Settlement (“Funding”) with Alat, a Public Funding Fund* (PIF) firm targeted on transformative expertise funding and sustainable manufacturing. The Strategic Collaboration and Funding will allow Lenovo to additional speed up its ongoing transformation, improve its international presence, enhance geographic diversification of its manufacturing footprint, and capitalize on the expansion momentum of the IT and Enterprise Companies trade within the MEA area. The Strategic Collaboration serves as a robust endorsement of Lenovo’s current technique, sturdy execution, operational excellence, dedication to sustainability, and steady funding in innovation.
The Strategic Collaboration, alongside a proposed US$2 billion Funding in zero coupon convertible bonds (“Bond Challenge”), supplies Lenovo with higher monetary flexibility to implement its confirmed technique, and can additional drive its international transformation right into a options and services-led enterprise. The Strategic Collaboration features a deliberate institution of a regional MEA headquarters in Riyadh, Kingdom of Saudi Arabia (KSA), and a brand new PC and server manufacturing facility within the Kingdom to serve clients within the area. KSA is getting into a brand new period of unpolluted power and has a objective to supply 50% of electrical energy from renewables by 2030. In assist of that objective and Lenovo’s personal 2050 net-zero goal, Lenovo will be capable to contribute to this imaginative and prescient and on the identical time profit from KSA’s clear energy and sustainable manufacturing initiatives to assist attain its personal targets. It would additionally allow Lenovo to boost its international provide chain resilience and adaptability by including one other location to its current international footprint, and to serve clients within the MEA area extra nimbly.
The MEA area continues to see sturdy development momentum fueled by an rising variety of large-cap initiatives and its sturdy economies, with the area’s IT and Enterprise Companies market measurement anticipated to succeed in near US$38 billion by 2027, in line with IDC estimates.** Constructing on Lenovo’s trade management within the MEA area and globally, the partnership with Alat will assist Lenovo faucet into the strong development within the area, unlock the transformative potential of digital applied sciences, and additional improve Lenovo’s place as a worldwide expertise powerhouse.
Yuanqing Yang, Chairman and CEO of Lenovo, stated: “By way of this highly effective strategic collaboration, Lenovo could have vital sources and monetary flexibility to additional speed up our transformation and develop our enterprise by capitalizing on the unimaginable development momentum within the MEA area. Wanting forward, Lenovo plans to construct a tech & manufacturing hub in Saudi Arabia and can assist outline the way forward for the area as a middle of innovation which Alat will profit from. It is a large vote of confidence in our firm, our market management, and our future development potential.”
Alat, a PIF firm, was launched on February 1, 2024, and can create a worldwide sustainable expertise manufacturing hub in Saudi Arabia targeted on superior industrials and electronics. Initially its key strategic enterprise areas shall be semiconductors, good units, good buildings, good home equipment, good well being, superior industrials, subsequent gen infrastructure applied sciences, electrification, and AI infrastructure. Extra data may be discovered right here.
Particulars of the Strategic Collaboration and Funding
As a part of the settlement, Lenovo will arrange a regional MEA headquarters in Riyadh, which is able to embody a buyer middle and a analysis and growth middle specializing in the MEA Area. Lenovo may also set up a brand new PC and server manufacturing facility within the KSA, extending the corporate’s current international footprint which already consists of 30+ manufacturing websites around the globe spanning Argentina, Brazil, China, Germany, Hungary, India, Japan, Mexico, and the USA.
As well as, the events have entered right into a Bond Subscription Settlement by which Lenovo will difficulty US$2 billion in convertible bonds to Alat, the online proceeds of which shall be used for repaying current money owed of Lenovo and common company and dealing capital functions. The Convertible Bonds are due in three years after issuance and shall be convertible to fairness at maturity at an preliminary conversion worth of HK$10.42 per share. This represents an roughly 10% premium over the common VWAP (Quantity Weighted Common Value) for the final 30 consecutive buying and selling days instantly previous to the date of the Bond Subscription Settlement. The closing of Lenovo’s issuance and Alat’s subscription of the Convertible Bonds is topic to, amongst others, Lenovo shareholders’ approval, and acquiring the related regulatory approvals.
Topic to the phrases and circumstances of the Strategic Collaboration Framework Settlement, Alat could have the correct to appoint a non-executive director candidate to Lenovo’s Board topic to regular procedures for director appointments in Hong Kong.
Proposed Warrants Issuance
Moreover, Lenovo’s Board has authorised a Proposed Warrants Issuance for 1,150,000,000 Warrants at a difficulty worth of HK$1.43 per Warrant. The proposed three 12 months Warrants issuance will allow Lenovo to boost further funds to assist future development, whereas on the identical time broadening its capital base, and is an extra vote of confidence within the firm’s ongoing transformation, international market management, and development momentum. As soon as authorised at Lenovo’s Normal Assembly, the Warrants shall be issued through a personal placement dealt with by Citigroup World Markets Asia Restricted.
Additional Data
For extra details about the launch of Alat, see the corporate’s launch announcement.
In relation to this transaction, Citi and Cleary Gottlieb Steen & Hamilton (Hong Kong) suggested Lenovo, and Morgan Stanley and Latham & Watkins suggested Alat.
* Public Funding Fund (PIF) is the KSA sovereign wealth fund.
** IDC’s Worldwide Semiannual Companies Tracker – April 2023
About Lenovo
Lenovo is a US$57 billion income international expertise powerhouse, ranked #217 within the Fortune World 500, and serving thousands and thousands of consumers on daily basis in 180 markets. Centered on a daring imaginative and prescient to ship Smarter Expertise for All, Lenovo has constructed on its success because the world’s largest PC firm with a pocket-to cloud portfolio of AI-enabled, AI-ready, and AI-optimized units (PCs, workstations, smartphones, tablets), infrastructure (server, storage, edge, excessive efficiency computing and software program outlined infrastructure), software program, options, and providers. Lenovo’s continued funding in world-changing innovation is constructing a extra equitable, reliable, and smarter future for everybody, all over the place. Lenovo is listed on the Hong Kong inventory alternate below Lenovo Group Restricted (HKSE: 992) (ADR: LNVGY). To seek out out extra go to https://www.lenovo.com, and skim in regards to the newest information through our StoryHub.
