| Wed 15 Oct 2008, 16:58 | | LAF - Lonrho Africa Withdraws From Shipping To Focus On Core African Businesses |
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LAF
LOLAF
LAF - Lonrho Africa Withdraws From Shipping To Focus On Core African Businesses
Lonrho Plc
(Formerly Lonrho Africa Plc)
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF; ISIN number: GB0002568813)
("Lonrho Africa" or "the Company")
LONRHO WITHDRAWS FROM SHIPPING TO FOCUS ON CORE AFRICAN BUSINESSES
Lonrho Plc (AIM: LONR), the conglomerate with a structured portfolio of African
investments announces that it has resolved to withdraw from the African sea
freight market in light of the current global economic slowdown and the credit
crunch.
Lonrho owns a 66.7% equity stake in SA Independent Liners (Pty) Ltd (SAILs) a
scheduled containerised shipping service that operates along the West African
coast and between South Africa and Europe.
Following a strategic review of Lonrho`s investment in SAILs and the funding
required to complete the implementation of the SAILs business plan and reach
profitability, the Lonrho Board concluded that, in the current world financial
markets, and with cogniscence of a global economic slowdown affecting the
shipping market, it was prudent to review its ongoing support for SAILs.
As a result of Lonrho`s decision not to provide further funding to SAILs, the
Board of SAILS, after calling for alternative support, unanimously concluded
that SAILs should be placed into liquidation today.
A key driver for Lonrho withdrawing from further support of SAILs is to focus
Lonrho on investments that demonstrate better risk/reward ratios in the current
global economic climate and to reaffirm Lonrho`s commitment to its core
businesses and focus on African markets as opposed to global ones.
In the six months ended 31 March 2008, SAILS incurred a loss of GBP6.1m on
turnover of GBP6.7m which reflected the substantial costs of developing new
routes in the shipping industry.
As with all Lonrho subsidiary companies, SAILS was an arms length, stand alone,
investment and has no cross guarantees from or exposure for other Lonrho
companies or Lonrho Plc. The liquidation of SAIL`s will not affect the growth of
the Company`s other businesses.
David Lenigas, Lonrho`s Executive Chairman commented:
"Following our strategic review, I am pleased to confirm that all of Lonrho`s
other investments in Africa remain on track and on budget and that forecasts for
the African market generally are for continued strong growth in our key sectors.
As an emerging market with little commercial credit, the Sub-Saharan Africa
market is well placed to continue its economic development."
"SAILs was the only company in the Lonrho portfolio that had a direct
correlation with depressed world markets. It was also the only Lonrho company
that had an ongoing requirement for funding and would have required in the
region of US$ 15 million from Lonrho to fully deploy the agreed business model
and become cash positive. Given a predicted downturn in global sea freight
rates; the tightening world economy and the impact of the credit crunch it was
prudent for the Lonrho Board to carry out a strategic review of its position in
relation to its investment portfolio across Africa. The conclusion was that the
current world market is not conducive to the roll out of a new African shipping
line."
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 +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
Date:
15 October 2008
South African Sponsor
Java Capital (Proprietary) Limited
Date: 15/10/2008 16:58:02 Produced by the JSE SENS Department.
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