Lenovo issues US$2 billion convertible bonds to Saudi Arabia sovereign fund to finance debt repayment, expansion

Lenovo, the world’s largest PC maker, is raising US$2 billion by issuing zero-coupon convertible bonds to a unit of Saudi Arabia’s sovereign wealth fund, close on the heels of similar offerings made by e-commerce giants Alibaba and JD.com as issuers seek to lower funding costs.

The three-year bonds will pay no interest but give the investor, Alat, a subsidiary of the Saudi Arabia’s Public Investment Fund (PIF), the option to convert its holdings into shares at an initial conversion price of HK$10.42 per share on the maturity date. This represents a discount of around 12 per cent from Tuesday’s closing price, and the conversion of the entire holdings would release an additional 1.5 billion shares into the market or around 12.09 per cent of the capital base as of the announcement date.

Source: REUTER