Lenovo Closes Strategic Investment of US$350 Million from Leading Private Equity Firms
Hong Kong — May 17, 2005 — Lenovo Group Limited (HKSE: 992; ADR: LNVGY) today announced that it has closed its previously announced US$350 million strategic investment by three leading private equity firms: Texas Pacific Group, General Atlantic LLC and Newbridge Capital LLC.
Lenovo also announced today that effective from closing of the strategic investment, James G. Coulter of Texas Pacific Group, William O. Grabe of General Atlantic, and Weijian Shan of Newbridge Capital have been appointed as non-executive directors, increasing the size of Lenovo's board to 11 members.
"This investment represents a strong vote of confidence in Lenovo's future," said Yuanqing Yang, chairman of Lenovo. "This transaction brings us more than capital. We look forward to the insight and experience that James Coulter, William Grabe and Weijian Shan will bring to Lenovo. We have a world-class management team and with these additions to our board, I am confident that we can accelerate our already successful transition, continue meeting customers' needs and introduce innovative, quality products." At the Extraordinary General Meeting held on May 13, 2005, Lenovo's shareholders passed the resolutions approving the issue of convertible preferred shares and warrants to the three private equity firms.
New Board Members Mr. Coulter is a founding partner of Texas Pacific Group. Prior to forming Texas Pacific Group, Mr. Coulter served as a Vice President of Keystone Inc. and also worked for Lehman Brothers Kuhn Leob Inc. Mr. Coulter serves on the boards of directors of Seagate Technology and Zhone Technologies Inc.
Mr. Grabe has been a managing director of General Atlantic LLC since 1992. Prior to joining General Atlantic, Mr. Grabe was the Vice President and Corporate Officer of IBM. Mr. Grabe is currently a director of Bottomline Technologies Inc., Digital China Holdings Limited, Patni Computer Systems Limited, Gartner Inc. and Compuware Corporation.
Mr. Shan is Co-Managing Partner of Newbridge Capital. Mr. Shan currently serves on the boards of the BOC Hong Kong (Holdings) Limited, China Unicom Ltd., TCC International Holdings Limited, and Baosteel Iron & Steel Co. Ltd.
As announced earlier, Lenovo is using approximately US$150 million of the total amount raised from the strategic investment to repurchase stock from IBM as part of the terms of its acquisition of IBM's PC business. The remaining balance of approximately US$200 million will be used for general corporate purposes.
According to the agreement, Lenovo will issue to Texas Pacific Group, General Atlantic and Newbridge Capital an aggregate 2,730,000 unlisted Series A cumulative convertible preferred shares at an issue price of HK$1,000 per share and unlisted warrants to subscribe for 237,417,474 shares for a total of US$350 million cash. Texas Pacific Group is investing US$200 million, General Atlantic US$100 million and Newbridge US$50 million.
Upon full conversion of the preferred shares and assuming the repurchase of shares from IBM, Texas Pacific Group, General Atlantic and Newbridge Capital together will own approximately 10.2% of Lenovo's enlarged issued share capital. Assuming full exercise of the warrants, the investors will own approximately 12.4%.
About Lenovo Lenovo Group Limited (HKSE: 992; ADR: LNVGY) is an innovative, international technology company formed by Lenovo Group’s acquisition of IBM’s Personal Computing Division. Lenovo develops, manufactures, and markets the most reliable, secure, and easy-to-use technology products.
Globally, the company offers customers the award-winning ThinkPad notebooks and ThinkCentre desktops, featuring the ThinkVantage Technologies software tools as well as ThinkVision monitors and a full line of PC accessories and options.
In China, Lenovo commands about one-third of the PC market covering all segments. Its leading-edge PCs are highly acclaimed for ease-of-use, tailor-made designs and customized solutions for various customer needs. Lenovo has been the number-one PC vendor in China for eight consecutive years and the best-selling PC vendor in Asia-Pacific (excluding Japan). Lenovo also has a broad and expanding product line encompassing mobile handsets, servers, peripherals and digital entertainment products for the China market.
Lenovo was listed on The Stock Exchange of Hong Kong in 1994 and is currently a constituent stock of the Hang Seng Index and the MSCI China Free Index. Its American Depositary Receipts are traded over-the-counter in the United States. In March 2004, Lenovo joined The Olympic Partner Program of the International Olympic Committee as the first Chinese company to become the computer technology equipment partner of the IOC for the period from 2005 to 2008.
For more information, please visit http://www.lenovo.com .
Angela Lee Lenovo: Hong Kong (852) 2516-4810 email@example.com
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