Lenovo to issue $2bn in convertible bond to PIF-backed Alat
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China’s Lenovo to issue $2bn in convertible bond to PIF-backed Alat

China’s Lenovo to issue $2bn in convertible bond to PIF-backed Alat

The personal computer and AI server maker plans to build a research and development centre in Riyadh as part of the deal

Kudakwashe Muzoriwa
Lenovo to issue $2bn in convertible bond to Alat

China’s Lenovo Group said on Wednesday that it would issue $2bn worth of zero-coupon convertible bonds to Alat, and has signed a collaboration agreement with the Public Investment Fund-backed firm to set up a manufacturing facility in Saudi Arabia.

Under the deal with Alat, the world’s largest maker of personal computers will set up its regional headquarters in Riyadh for the Middle East and Africa (MEA) region. Lenovo will also build a new facility focused on smart sustainable manufacturing to serve customers in the MEA region.

Lenovo said that the initial conversion price of the bonds is HKD10.42 per share and they will be convertible to nearly 1.50 billion shares after three years, according to a regulatory filing.

The company said it would use the issuance proceeds to repay existing debt and for other general works.

“With the establishment of a regional headquarters in Riyadh and a world-class manufacturing hub, powered by clean energy, in Saudi Arabia, we expect the Lenovo team to further their potential across the MEA region,” said Amit Midha, CEO at Alat.

Alat’s growing portfolio

Meanwhile, Lenovo is the latest Chinese company to reach an investment agreement with Alat.

Alat unveiled a $200m partnership with a Chinese surveillance technology firm Dahua Technology in February to manufacture surveillance hardware in Saudi Arabia. The joint venture will manufacture hardware, such as sensors, used in “smart cities” and establish a research and development centre in the kingdom.

Together with SoftBank, Alat will invest as much as $150m to establish a fully automated manufacturing and engineering hub in Riyadh. The venture will build industrial robots based on intellectual property developed by SoftBank, with the first factory set to open in December.

Furthermore, its partnership with Carrier Corporation aims to establish advanced manufacturing and R&D facilities focused on smart climate and energy solutions in the kingdom.

The investment vehicle expects to sign deals with more key international players and invest in large industrial firms Saudi Arabia wants to see set up operations locally.

Earlier in May, Alat launched two new business units – electrification and artificial intelligence infrastructure – to strengthen the global electricity grid technology and meet the growing demand for advanced AI infrastructure.

The company has set up nine business units focused on sustainable technology manufacturing since its founding in February, and plans to invest $100bn by 2030.

Read: Saudi Arabia’s Alat unveils electrification, AI Infrastructure business units

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