Lenovo plans $2b Saudi zero-coupon bond investment deal

Lenovo Group Ltd. plans to sell $2 billion in zero-coupon convertible bonds to Saudi Arabia’s sovereign wealth fund, as part of a broader strategic partnership, Bloomberg reported.

The bonds will be issued to Alat, an investment firm owned by the Public Investment Fund, at approximately 12 per cent discount to Lenovo’s previous day’s closing share price.

Lenovo will use the funds to establish a research centre in Riyadh and expand its regional production capacity. This move aligns with Saudi Arabia’s goal of attracting tech investments in an effort to establish a regional tech leadership.

Separately, Lenovo intends to issue 1.15 billion three-year warrants to raise additional funds. This initiative contributes to a surge in convertible bond offerings by Asian firms, totaling around $9 billion this month.