Lenovo to issue $2 bln bonds to Saudi wealth fund unit; shares slide

Investing.com
Updated May 29, 2024 05:56
Mitrade

Investing.com-- Lenovo Group (HK:0992) entered an agreement with a unit of Saudi Arabia’s sovereign wealth fund to issue $2 billion worth of bonds and establish a bigger precense in the Middle East, although Hong Kong shares of the PC maker still fell sharply from nine-year highs. 


Lenovo said it entered a deal with Alat, a unit of the Saudi Arabian Public Investment fund, under which it will issue $2 billion zero-coupon convertible bonds to the unit. The bonds are interest free and will be repayable in three years. 


The two firms also entered a “strategic collaboration,” under which Lenovo will set up a Middle East headquarters and also establish a manufacturing facility in Saudi Arabia, with assistance from Alat. 


Shares of Lenovo fell as much as 6% after the deal, before recouping some losses to trade down 2.5% at HK$11.52 a share by 22:38 ET (02:38 GMT). 


The stock was among the bigger weights on the Hang Seng index, which fell 1.3% on broader losses in technology stocks. 


Losses in Lenovo’s shares come amid some profit-taking after they surged to a near nine-year high earlier this week. The firm clocked a strong first quarter in 2024, as it recovered from a COVID-driven slump in device sales and revenue. 


The firm recently unveiled two new PCs configured to directly run artificial intelligence- a growing trend among device makers to capitalize on the new industry. 

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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