Lonrho to Acquire 51% Stake and Control of African Microfinance Bank

21 September 2007
Content from a Premium Partner
Lonrho (London)
press release

Lonrho (AIM : LONR), the conglomerate with a structured portfolio of African investments, is pleased to announce that it has signed a Letter of Intent and a formal Term Sheet to acquire 51% and Board control of the Mozambiquan Microfinance Bank ‘Socremo – Banco de Microfinancas’.

Lonrho will take equity and Board control of the Bank and has agreed to buy out a series of smaller shareholders to restructure the bank. Under the new structure, Lonrho will own 51% of the Bank with other shareholders being AfriCap Microfinance Fund (www.africapfund.com) 21%, GAPI 11%, and Nordic MicroCap (www.microcap.se) 10% with the remaining equity being held in Treasury.

Socremo has developed significantly since it was founded in 1999. The Microfinance market has matured from NGO based to the formal banking sector. Socremo has progressed into a structured and formal financial institution that provides a growing range of financial products to this market sector and supports expanding SME’s (Small and Medium Enterprises).

Socremo is Mozambique’s second largest Microfinance bank with 30,000 customers serviced through eight branches. The bank employs 223 people and has a strong and quality management structure in place. The number of accounts at the bank has grown 160% and the bank’s credit portfolio has grown 103% during the past year.

The transaction is subject to Reserve Bank of Mozambique approval.

David Lenigas, Chairman and CEO of Lonrho commented:

“The services provided by Microfinance Banks are an essential building block in the support of sustainable economic and social development in Africa. We see this market as one of the most fundamental opportunities for Lonrho to partake in creating stable and viable economies throughout the Continent. Micro loans, savings and insurance can transform the lives of people in developing countries who want a chance to work their way out of poverty. Socremo is a successful and reliable institution and Lonrho will utilise Socremo’s experience and knowledge as a base to expand this microfinance model into other countries.”

ENQUIRIES

  • 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 297903
  • Alisdair Haythornthwaite +44 (0) 20 7743 6676, +44 (0) 7714 721379
  • Collins Stewart Europe Hugh Field +44 (0) 20 7523 8350 Jonny Sloan

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
  • Luba Freeport - www.lubafreeport.com
  • Fly540 - www.fly540.com
  • Norse Air - www.norseair.co.za
  • Swissta Holdings - www.swissta.com
  • SA Independent Liner Services
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