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SCMP Reporter

With US$950 million pouring into its war chest over the past eight days, mainland computer giant Lenovo Group has put fund raising on the backburner and started moving to conclude its acquisition of IBM's personal-computer business.

Lenovo chief financial officer Mary Ma Xuezheng yesterday said there were no immediate plans for listing in the United States because the integration of the IBM unit was now top priority.

'That is our target,' Ms Ma said, noting Hong Kong-listed Lenovo had already raised enough funds to finance the US$1.75 billion IBM deal.

A big confidence-booster for Lenovo was a US$350 million strategic investment agreement announced yesterday with United States-based private equity firms Texas Pacific Group,  General Atlantic Group  and Newbridge Capital.

Of that amount, US$150 million will be used to finance the IBM acquisition, with the balance added to Lenovo's working capital.

The company will issue a combined 2.73 million unlisted convertible preferred shares to the three new investors at $1,000 apiece and unlisted warrants for 237 million  shares.

Texas Pacific, Lenovo's rival bidder last year for the IBM division, is investing US$200 million. General Atlantic, Lenovo's adviser in the IBM deal, signed on for US$100 million. Newbridge, a unit of Texas Pacific and Blum Capital Partners, is putting up US$50 million.

The deal followed a US$600 million revolving credit and loan facility secured by Lenovo on March 24 from a syndicate of 20 banks. The package comprised US$500 million for the IBM acquisition and US$100 million for working capital.

When the acquisition closes at the end of the second quarter, IBM is slated to receive US$800 million in cash and Lenovo common shares valued at US$450 million, based on the share's closing price on the last day of trading before the announcement of the sale in December. Lenovo will also assume US$500 million of IBM debt.

General Atlantic managing director Vince Feng said each of the three new investors would have representation on Lenovo's 12-member board.

General Atlantic plans to nominate managing director William Grabe, also a director at Lenovo sister company Digital China, for election to the  board.

'We will be active participants in strategic planning,' Mr Feng said. 'In the near term, execution is critical for successfully integrating the operations of IBM's  personal-computer business with Lenovo.'



Cashed-up Lenovo now ready to swallow IBM unit