Lenovo and Alat Partner to Establish MEA Headquarters and Manufacturing Facility in Saudi Arabia

A modern technology hub in Riyadh, Saudi Arabia, featuring a state-of-the-art PC and server manufacturing facility. The scene should include advanced

Lenovo Group has entered into a strategic collaboration framework agreement and a bond subscription agreement with Alat, a Public Investment Fund (PIF) company focused on transformative technology investment and sustainable manufacturing.

The collaboration includes establishing a regional MEA headquarters in Riyadh and a new PC and server manufacturing facility in Saudi Arabia to serve regional customers.

Under the bond subscription agreement, Lenovo will issue $2 billion in convertible bonds to Alat. This strategic collaboration will help Lenovo accelerate its transformation, enhance its global presence, and capitalize on the growth momentum of the IT and Business Services industry in the MEA region.

This partnership serves as a strong endorsement of Lenovo’s strategy, operational excellence, and commitment to sustainability and innovation. The collaboration and the proposed $2 billion investment in zero-coupon convertible bonds provide Lenovo with financial flexibility to implement its strategy and drive its global transformation into a solutions and services-led business.

Saudi Arabia aims to produce 50% of its electricity from renewables by 2030. Lenovo’s participation in this vision aligns with its own 2050 net-zero target, benefiting from the kingdom’s clean power and sustainable manufacturing initiatives.

The new facility will enhance Lenovo’s global supply chain resilience by adding another location to its existing footprint. The MEA region is experiencing strong growth, with its IT and Business Services market size expected to reach nearly $38 billion by 2027, according to IDC estimates.

Yuanqing Yang, Chairman and CEO of Lenovo, stated: “This strategic collaboration with Alat provides Lenovo with significant resources and financial flexibility to accelerate our transformation and grow our business by leveraging the growth momentum in the MEA region. We plan to build a tech and manufacturing hub in Saudi Arabia, which will help define the region’s future as a center of innovation.”

Alat, launched by PIF on February 1, 2024, aims to create a global sustainable technology manufacturing hub in Saudi Arabia, focusing on advanced industrials and electronics. Its key strategic business areas include semiconductors, smart devices, smart buildings, smart appliances, smart health, next-gen infrastructure technologies, electrification, and AI infrastructure.

Details of the Strategic Collaboration and Investment:

  • Lenovo will set up a regional MEA headquarters in Riyadh, including a customer center and an R&D center focusing on the MEA Region.
  • A new PC and server manufacturing facility will be established in Saudi Arabia, extending Lenovo’s global footprint, which includes 30+ manufacturing sites worldwide.
  • Lenovo will issue $2 billion in convertible bonds to Alat, with proceeds used to repay existing debts and for general corporate purposes. The bonds are due three years after issuance and will convert to equity at maturity at an initial conversion price of HK$10.42 per share.
  • Alat will have the right to nominate a non-executive director candidate to Lenovo’s Board.
  • Lenovo’s Board has approved a proposed issuance of 1,150,000,000 warrants at an issue price of HK$1.43 per warrant. The three-year warrants issuance will enable Lenovo to raise additional funds to support future growth and broaden its capital base. Once approved at Lenovo’s General Meeting, the warrants will be issued via a private placement handled by Citigroup Global Markets Asia Limited.

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