Lenovo, the world’s No. 2 PC manufacturer, says it is boosting its “financial flexibility” by raising nearly $500 million in new capital.
The financial moves disclosed in a securities filing with the Hong Kong stock exchange where Lenovo shares are traded also includes a number of other moves, including the formation of a new joint venture that includes participating by Chairman and CEO Yang Yuanqing.
The financing comes in the wake of a surprise quarterly loss reported by Lenovo in August. It has lost the No. 1 PC sales ranking to HP and also has suffered with lagging smartphone and server sales.
Lenovo’s slump over the past two years has led to several changes in management and reorganizations within its smartphone and server businesses.
“The investment will allow the company to strengthen its working capital position and provide it with the financial flexibility to achieve its strategic objectives to enhance, expand and establish its leading position in the industry,” Lenovo said in the filing.
According to the South China Morning Post, which first reported the news, Lenovo’s parent firm Legend Holdings and Yang along with other members of Lenovo senior management created the new venture through the issuing of 906 million new Lenovo Group shares.
The joint venture is called Union Star Limited, and it will own 7.54 percent of Lenovo’s shares.
Legion Elite, which is owned by Legend Holdings, and SHL, which is owned by Yang, are the largest owners of Union Star, the Post reported.
Legion Elite is helping finance the deal with $160 million, the news site added.
Lenovo, which also is a global seller of smartphones, Internet devices and servers, operates headquarters in Morrisville and Beijing.
