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China’s Lenovo issues $2bn bonds to repay Saudi Alat debt

By Pramod Kumar
As part of the agreement, Lenovo will establish its Middle East and Africa headquarters in Saudi Arabia Reuters/Jason Lee
As part of the agreement, Lenovo will establish its Middle East and Africa headquarters in Saudi Arabia

China’s Lenovo Group has issued $2 billion in convertible bonds to Alat, a Public Investment Fund (PIF)-backed technology manufacturing company, to repay its existing debt and boost working capital.

As part of the agreement, the Hong Kong-headquartered personal computer maker will open a new PC and server manufacturing facility and establish its Middle East and Africa (MEA) headquarters in Saudi Arabia.

The new facility will enable Lenovo to expand its global supply chain and serve customers in the MEA region.

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The initial conversion price of the convertible bonds has been set at HK$10.42 per share. The bonds will be converted to nearly 1.50 billion shares after three years.

The MEA IT and business services market size is expected to reach $38 billion by 2027, according to IDC, a global consultancy firm.

Lenovo plans to build a tech and manufacturing hub in Saudi Arabia, which Alat will benefit from, said chairman and CEO Yuanqing Yang.

Alat said in February that it intends to invest $100 billion by 2030 and has struck deals to create factories to build industrial robots and surveillance products.

The PIF unit has already partnered with international technology companies such as Japan’s Softbank Group, US-headquartered Carrier Corporation, China’s Dahua Technology and Saudi Technology and Security Comprehensive Control Company (Tahakom) to promote carbon-zero manufacturing.

Alat, chaired by Crown Prince Mohammed bin Salman, plans to generate 39,000 jobs in the kingdom and achieve a direct non-oil GDP contribution of $9.3 billion by 2030.

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