Lonrho's LonZim Banks £32.3 Million

20 July 2007
Content from a Premium Partner
Lonrho (London)
press release

Lonrho Plc ("Lonrho"), the African conglomerate with a diverse portfolio of investments, ranging from infrastructure, transportation, support services and natural resources, announces today that its newly established subsidiary LonZim Plc ("LonZim") has raised an initial £32.326 million (US$66.234 million) from a number of existing institutional shareholders of Lonrho by issuing 46,180,958 LonZim shares.

Lonrho holds 30,000,001 shares in LonZim as the founding shareholder (cost £3,001) representing 39.4% of that company and currently holds all board positions.

LonZim intends to raise additional funds and seek a listing on a major stock exchange over the coming months.

On listing, Lonrho's arrangements with LonZim will be: ·

  • Lonrho's initial shareholding will be escrowed for a period of 5 years.
  • Lonrho will hold a management contract with LonZim whereby it will receive 1% of gross assets under management and 2½ % of gross turnover of LonZim per annum.
  • Lonrho will not compete with LonZim in Zimbabwe whilst Lonrho manages LonZim.
  • LonZim funds will be escrowed until successful admission to trading on a stock exchange.

LonZim's principal focus will be to acquire and invest in key assets in the property, infrastructure, hotel and commercial sectors in Zimbabwe and neighbouring countries including the important access corridor to the coast at Beira in Mozambique.

Lonrho's management team and consultants offer an in-depth understanding of business and investment in Africa, including Zimbabwe. The team brings significant experience in successfully brokering and completing transactions and developing companies in challenging parts of the continent.

LonZim will adhere to all international and national laws applying to foreign investment in Zimbabwe and plans to implement and adhere to best practice in corporate governance.

David Lenigas, Lonrho's Executive Chairman and Chief Executive, commented:

"There are clearly risks associated with investing in Zimbabwe and this financial commitment from Lonrho's existing institutional investors by subscribing for LonZim shares, prior to a listing, demonstrates their belief that the opportunities for economic growth in the country are enormous."

"Lonrho believes that there is a substantial commercial opportunity in the Zimbabwean market, which has deteriorated due to severe underinvestment. This potentially offers significant upside. As such I believe that cautious and well informed investment in Zimbabwe and the coastal access corridor will ultimately offer excellent returns for LonZim shareholders as well as Zimbabwean businesses and the Zimbabwean economy.

"I strongly believe that the best way to encourage economic growth within a country and nurture the development of a strong infrastructure and thriving business culture is through private, foreign direct investment and LonZim fits with that principle."

For further information, please contact:

  • Lonrho Plc +44 (0) 20 7016 5105
  • David Lenigas, Chief Executive +44 (0)7881 825 378
  • Emma Priestley, Executive Director +44 (0)7867 785 177
  • Pelham PR Charles Vivian +44 (0) 20 7743 6672, +44 (0) 7977 297 903
  • Alisdair Haythornthwaite +44 (0) 20 7743 6676, +44 (0) 771 472 1379
  • Collins Stewart Europe Hugh Field and Ellen Francis +44 (0) 20 7523 8000

Notes to Editors:

About Lonrho:

Lonrho Plc is an expanding conglomerate that is rapidly growing a successful business throughout Africa. The Company is listed on the London AIM stock exchange (LONR). Lonrho is strategically focused on the development of business opportunities in infrastructure, transportation, support services and natural resources. The Company has over 20,000 shareholders and substantial institutional backing to support its mandate to build a profitable business that plays a fundamental role in the development of the African economy.

Since 2006, the Company has invested in or acquired control of:

  • Hotel Cardoso - www.hotelcardoso.co.mz (retained)
  • Nare Diamonds - www.narediamonds.com
  • Brinkley Mining - www.brinkley-mining.com
  • Luba Freeport - www.lubafreeport.com
  • Fly540 - www.fly540.com
  • Norse Air - www.norseair.co.za
  • Swissta Holdings - www.swissta.com
  • Countermine - www.countermine.com
  • SA Independent Liner Services
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