Lenovo to issue US$2 billion of convertible bonds to Saudi’s Alat to repay debt

LENOVO said on Wednesday (May 29) it would issue US$2 billion worth of zero-coupon convertible bonds to Alat, and had signed a collaboration agreement with the Saudi Arabian company to set up a new manufacturing facility in the Middle East.

The company is the latest to join a rush in Asia to raise capital through convertible bonds. Last week, Alibaba decided to raise about US$4.5 billion via sale of convertibles, and JD.com announced a US$1.5 billion convertible bond sale plan.

The proceeds from the issuance will be used for repaying existing debt and for other general works, Lenovo said.

Under the agreement with Alat, Lenovo will establish a regional headquarter in the Middle East and a new manufacturing facility in Saudi Arabia to increase its geographic diversification.

Alat was launched this year to help make Saudi Arabia a global centre for electronics and advanced industries. REUTERS