On May 29, 2024, Lenovo Group announced a significant strategic partnership with Alat Enate, a company under Saudi Arabia's Public Investment Fund (PIF). Alat Enate will invest $2 billion in Lenovo Group in the form of zero-interest convertible bonds. This funding will support Lenovo in establishing a regional headquarters for the Middle East and Africa market in Riyadh, Saudi Arabia, which will include customer centers, R&D centers, and new manufacturing facilities for PCs and servers.
According to the bond subscription agreement, Lenovo Group will issue $2 billion in convertible bonds to Alat Enate, with the net proceeds used to repay existing debt, supplement working capital, and for general corporate purposes. The bonds will mature three years after issuance. Additionally, under the strategic cooperation framework agreement, Alat Enate will have the right to nominate a non-executive director to the Lenovo Group board. The issuance of three-year warrants will help Lenovo Group raise additional funds to support future development, expand its capital base, and further demonstrate confidence in the company's strategic transformation and business growth momentum.
As a leading global sovereign wealth fund, PIF manages assets exceeding $700 billion and is a key force in driving Saudi Arabia's Vision 2030 plan. Its wholly-owned subsidiary, Alat Enate, focuses on collaborating with global leaders in manufacturing and technology to drive industrial transformation and help Saudi Arabia become a global center for sustainable technology.
This cooperation not only highlights Lenovo Group's excellence in strategy, execution, operational capability, sustainability commitment, and innovative investment but also provides greater financial flexibility for its intelligent transformation strategy, accelerating business expansion and strengthening its global diversified manufacturing layout. Lenovo's manufacturing base construction will benefit from Saudi Arabia's active efforts in clean energy and sustainable manufacturing, better serving the region's development needs. This cooperation will enhance Lenovo Group's global supply chain resilience and flexibility, providing faster service to customers in the region.
Lenovo Group Chairman and CEO Yang Yuanqing said, "Through this strategic cooperation, Lenovo Group will gain more resources and financial flexibility, accelerating transformation and business expansion, seizing significant growth opportunities in the Middle East and Africa region. We plan to establish a technology and manufacturing base in Saudi Arabia, helping the region become a future innovation center. Alat Enate will also benefit from this cooperation, demonstrating great confidence in our company, market leadership, and future development potential."
Alat Enate CEO Amit Midha said, "We are honored to become a strategic investor in Lenovo Group, working together to help them maintain their leading position in the global technology industry. As Lenovo Group establishes a regional headquarters in Riyadh and builds a world-class manufacturing base driven by clean energy in Saudi Arabia, we look forward to seeing Lenovo Group further unleash its potential in the Middle East and Africa region."
The digital economy in the Middle East and Africa is growing rapidly. IDC predicts that by 2027, the information technology and business services market in the region will reach nearly $38 billion. With its leadership in the region and globally, Lenovo Group's cooperation with Alat Enate will unleash the transformative potential driven by digital technology, enhancing its status as a leading global technology company.