Lonrho Wins Contract to Redevelop and Manage The 'Karavia', A 250 Room Hotel in Lubumbashi, Democratic Republic of Congo

20 February 2008
Content from a Premium Partner
Lonrho (London)
press release

Lonrho plc (AIM: LONR) today announces that, following a competitive tender process, Lonrho has been awarded the redevelopment and subsequent management contract for the Karavia Hotel in Lubumbashi by the Government of the Democratic Republic Of Congo (DRC).

The tender process was run by the Comite de Pilotage de la Reforme des Entreprise Publiques, (COPIREP), the Government department for reconstruction projects and the Lonrho proposal was approved by the Council of Ministers.

A new company, Karavia 2008, will be established to be owned as to 30% by the Government of the DRC, 35% by Lonrho and 35% by De Moerloose Group, a large Belgian group operating in the DRC in the automotive, distribution and airlines business. Karavia 2008 will hold a 25-year lease on the property for a peppercorn rent, renewable for a further period of 25 years. Karavia 2008 will invest up to US$ 20 million in the refurbishment project to bring the hotel back to an international five star standard. The funds will be raised as a combination of equity and debt finance.

The Karavia hotel is currently the only potential large-scale accommodation facility in Lubumbashi, the burgeoning centre of the copper and cobalt industry in the DRC. The hotel, originally a Sheraton Hotel, has been derelict for over ten years and requires a complete refurbishment.

The hotel market in Lubumbashi is currently chronically underserviced as there are no international standard accommodation facilities meeting the growing market demand, being driven by executives and mining engineers developing the world class natural resource projects in the region, such as Phelps Dodge; Anvil; Nikanor; and First Quantum. In excess of US$ 12 billion is being invested in natural resource projects in Katanga province, of which Lubumbashi is the capital.

Lonrho Hotels will have the management contract for the hotel on a renewable ten-year management contract. The hotel will be branded the ‘Karavia : A Lonrho Luxury Hotel’. It is estimated that the project will take approximately twelve months to complete.

David Lenigas, Executive Chairman of Lonrho stated:

“Lubumbashi is experiencing significant economic growth as new copper and cobalt projects are planned and come on line. This in turn has generated large numbers of expatriate and Congolese visitors, who currently have very limited choices for accommodation. The requirement for an international standard hotel to cater for this market is clear and forecast occupancy and room rates are excellent. The refurbishment of the property will create an asset that the DRC Government can be proud of, and the rebuilt hotel will be a fitting testament to the progress in the country since the democratic elections.”

ENQUIRIES

  • Lonrho Plc +44 (0)20 7016 5105
  • David Lenigas, Executive Chairman +44 (0)7881 825 378
  • Geoffrey White, Chief Executive Officer +44 (0)7717 307 308
  • 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: NOMAD to Lonrho Hugh Field / Jonny Sloan +44 (0) 20 7523 8350
  • 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
  • Lonrho Mining - www.lonrhomining.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 – www.saliners.com
  • Bytes and Pieces -
  • Celsys Limited – www.celsys.co.zw
  • Kwikbuild – www.kwikbuild.co.za
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