NEC sells entire stock in Lenovo

Published:  6 Sep at 10 AM

Shares in Lenovo, the Chinese computer manufacturer, have dipped following a decision by Japanese firm NEC to dispose of all of its stock in the company. NEC purchased more than 280 million shares in Lenovo as part of a deal which would see it retain 51 per cent of a new venture the two firms were working on to manufacture computers for the Japanese market.

Those shares have now been sold in a deal worth around HK$1.86 billion. Originally, NEC agreed that it would not be permitted to sell the shares for two years following the agreement with Lenovo, which was signed on 1 July last year.

Lenovo has said that the premature sale of the shares will not have any influence on the deal which has been struck between the two firms to grow their presence in Japan.

Lenovo told the Hong Kong Stock Exchange earlier in the week that NEC had approached it for permission to offload the shares at an earlier date than was originally agreed. The Chinese firm said it had authorised the sale because of an ongoing business relationship and because NEC required the financing.

Lenovo Group vice president, Roderick Lappin, who also holds the title of executive chairman at Lenovo NEC Holdings, downplayed the early share sale by pointing out that NEC would have been able to sell its holdings in 10 months anyway. Shares in Lenovo lost approximately eight per cent of their value following the sale to end at HK$6.08 each.