Arab News, Thu, May 30, 2024 | Dhu al-Qadah 22, 1445
PIF’s Alat, Lenovo forge $2bn partnership to establish manufacturing hub in Saudi Arabia
Saudi Arabia:
Saudi Arabia’s pursuit of a sustainable manufacturing hub gains momentum as Alat
partners with Lenovo Group to establish a facility and invest $2 billion through
zero-coupon convertible bonds.
As part of the agreement, the Chinese firm will
set up a regional headquarters in Riyadh for the Middle East and Africa region,
along with a new manufacturing hub in the Kingdom, to supplement its existing
30-plus production sites worldwide. The facility will prioritize smart,
sustainable manufacturing and will initially cater to customers in the MEA
region.
The Public Investment Fund-owned firm’s investment
in Lenovo will be in the form of a bond subscription agreement, with the
electronics giant issuing $2 billion in convertible bonds.
Amit Midha, CEO of Alat, said: “We are incredibly
proud to become a strategic investor in Lenovo and partner with them on their
continued journey as a leading global technology company.”
He added: “With the establishment of a regional
headquarters in Riyadh and a world class manufacturing hub, powered by clean
energy, in the Kingdom of Saudi Arabia, we expect the Lenovo team to further
their potential across the MEA region.”
This move aligns with the Saudi firm’s commitment
to Vision 2030, supporting environmentally-conscious production powered by clean
energy, creating new jobs in the industrial and electronics sectors, and
capitalizing on regional economic growth opportunities.
Through this investment, Alat anticipates creating
15,000 direct and 45,000 indirect jobs in Saudi Arabia, generating a cumulative
gross domestic investment impact of $10 billion by 2030.
Lenovo’s convertible bonds will be due three years
after issuance and will convert to equity upon maturity at an initial conversion
price of 10.42 Hong Kong dollars ($1.33) per share.
“Through this powerful strategic collaboration,
Lenovo will have significant resources and financial flexibility to further
accelerate our transformation and grow our business by capitalizing on the
incredible growth momentum in the MEA region,” said Yuanqing Yang, chairman and
CEO of Lenovo.
He added: “Looking ahead, Lenovo plans to build a
tech and manufacturing hub in Saudi Arabia and will help define the future of
the region as a center of innovation which Alat will benefit from. This is a
huge vote of confidence in our company, our market leadership, and our future
growth potential.”
Moreover, the partnership between Alat and Lenovo
aims to harness the transformative potential of digital technologies while
establishing the region as a global innovation hub.
This collaboration is expected to significantly
impact the region’s journey toward a diversified, resilient, and technologically
advanced future.
Launched in February by Crown Prince Mohammed bin
Salman, Alat aims to position Saudi Arabia as a global center for sustainable
technology manufacturing, focusing on advanced technologies and electronics.