Lonrho Plc, ( AIM : LONR ) today announces that, following the announcement in February this year that it had won the tender process for the redevelopment of the hotel Karavia, the formal agreement and 'Build, operate, transfer' terms for redevelopment were signed in Kinshasa, The Democratic Republic of the Congo, on the 7th May 2008.
The signing ceremony took place following two months of detailed negotiations with the Government department for reconstruction, Comite de pilotage de la Reforme des Enterprise Publiques ( COPIREP ). Signing and presenting the Government at the ceremony which was held at The Minister of Portfolio's office,were the Minister of Portfolio, Her Excellency Mabunda Lioko and the Minister of Environment, Conservation and Tourism, His Excellency Jose Endundo Bononge.
Under the terms of the final agreement, Lonrho will lease the property for 15 years, renewable for a further 15 years for a yearly royalty fee of 1% of annual gross revenue. The hotel is expected to open by the 1st July 2009. The project is budgeted to cost US$ 20 million, consisting of US$ 15 million refurbishment and US$ 5 million pre-opening costs and working capital. Under Lonrho agreements, the DBSA is expected to provide US$ 10 million commercial funding, and a local bank will provide the working capital facilities.
Lonrho has established a new company to develop the project, 'Grand Karavia SARL' with a local partner, DeMoerloose Group, on a 50/50 joint venture basis. Lonrho will provide Board control, and Lonrho Hotels has a management contract to operate the hotel once it is completed.
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 complete refurbishment. The hotel market in Lubumbashi is significantly underserviced with no international standard facilities available for current demand. Demand for hotel rooms is forecast to soar as US$ 12 billion of new copper and cobalt projects are to be developed in the region over the next five years.
David Lenigas, Executive Chairman of Lonrho stated:
"I am delighted that, following the professional and transparent discussions with COPIREP and the relevant Ministries in Kinshasa, this exciting project is now ready to start. Work will commence on site in six weeks and the hotel will be operational within twelve months. I am confident that the Grand Karavia will become one of the most renowned hotels in Southern Africa."
LONRHO 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 de Borchgrave, Executive Director +44 (0)7867 785 177
Pelham PR
Charles Vivian +44 (0) 20 7743 6672
+44 (0) 7977 297903
James MacFarlane +44 (0) 20 7743 6375
+44 (0) 7841 672831
Collins Stewart Europe : NOMAD to Lonrho
Hugh Field / Simon Alston +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's shares are traded on the London AIM stock exchange (LONR). Lonrho is strategically focused on the development of business opportunities in infrastructure, transportation, support services, hotels and natural resources. The Company has over 19,000 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)
Lonrho Mining - www.lonrhomining.com
Luba Freeport - www.lubafreeport.com
Fly540 - www.fly540.com
Swissta Holdings - www.swissta.com
SA Independent Liner Services - www.saliners.com
Bytes and Pieces www.bytespieces.com
Kwikbuild - www.e-kwikbuild.co.za
LonZim - www.lonzim.co.uk
