LENOVO GROUP (00992) plans to issue $2 billion in new convertible bonds and simultaneously redeem old bonds at a premium, along with repurchasing shares.

Lenovo Group (00992) announced that on June 17, 2026 (after trading hours), the company entered into a bond subscription agreement with an agent, whereby the agent has conditionally agreed to subscribe for or induce subscribers to subscribe for the company's new convertible bonds with a total principal amount of 2 billion US dollars, and to make payment for this or induce subscribers to make payment. The initial conversion price is set at 36.70 Hong Kong dollars per share. On the same day, the company entered into a transaction agent agreement with the transaction agent regarding the company's 2029 convertible bonds with a principal amount of 675 million US dollars and a coupon rate of 2.50% due in 2029, whereby the transaction agent has been appointed to assist the company in collecting intentions from existing holders of the 2029 convertible bonds who are willing to sell their bonds back to the company. The buyback price of the existing 2029 convertible bonds is set at 293.20% of the principal amount. As of the announcement date, the company has received commitments from eligible bondholders through the transaction agent to sell a total principal amount of approximately 225 million US dollars of existing 2029 convertible bonds to the company. The remaining total outstanding principal amount of the existing 2029 convertible bonds not yet repaid is approximately 450 million US dollars. The company plans to use the proceeds from the bond issuance to provide funds for the proposed simultaneous buyback. To ensure that the rights of existing shareholders are not diluted, the company intends to conduct share repurchases on the market from time to time after the bond issuance and proposed simultaneous buyback are completed, subject to not triggering a mandatory general offer obligation under takeover rules. As the existing general mandate for share buyback granted by shareholders at the previous annual general meeting is about to expire, the company will seek shareholder approval at the upcoming annual general meeting to grant directors a general mandate to repurchase shares in the market before the expiry date. The estimated net proceeds from the bond issuance (after deducting estimated commissions and expenses) are approximately 1.979 billion US dollars. Based on the initial conversion price, the net issue price is equivalent to approximately 36.31 Hong Kong dollars per share. It is expected that the net proceeds will be used for: (1) refinancing existing debt (including allocating funds for the proposed simultaneous buyback); (2) share repurchases; and (3) general corporate purposes.