| Mon 7 Jun 2010, 14:16 | | LAF - Lonrho - Lonrho Agriculture Acquires 51% Of Oceanfresh Seafood (Pty) Ltd |
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LAF
LOLAF
LAF - Lonrho - Lonrho Agriculture Acquires 51% Of Oceanfresh Seafood (Pty) Ltd
To Expand The Company Operations Into New Markets Including The Usa
LONRHO PLC
(Formerly Lonrho Africa Plc)
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF; ISIN number: GB0002568813)
("Lonrho" or the "Company")
LONRHO AGRICULTURE ACQUIRES 51% OF OCEANFRESH SEAFOOD (PTY) LTD TO EXPAND THE
COMPANY OPERATIONS INTO NEW MARKETS INCLUDING THE USA
Lonrho Plc (AIM : LONR) is delighted to announce that Lonrho`s agriculture
division ("Lonrho Agriculture") has purchased 51% of Oceanfresh Seafoods
(Propriety) Ltd, (`Oceanfresh`) a leading vertically integrated producer and
supplier of premium, sustainable seafood from Africa. The acquisition is aimed
at expanding the operations of Lonrho Agriculture into new markets including the
USA.
Established in 2000, Oceanfresh is the market leader in the supply of deep sea
crustacean (lobsters and prawns) from Mozambique and a major supplier of premium
finfish from South Africa and Mozambique. Oceanfresh operates a sustainable
fishing model, fishing in regions that are well below agreed 35% sustainable
fishing volumes.
The Oceanfresh operations consist of harvesting premium finfish and shellfish
off the coasts of Mozambique and South Africa. Sourcing product mainly via third
party contracted vessels the catch is processed at the Oceanfresh processing
plant in Maputo, Mozambique. The processed fresh and frozen produce is marketed
and distributed to existing customers in Europe and South Africa. The company
has recently successfully completed a trial program to commence exports to the
USA retail market with leading US retailer Costco. The support now available
from Lonrho will provide the necessary resources to develop exciting new market
opportunities
The existing management team will remain as significant shareholders in
Oceanfresh and continue to run the day to day operations. Lonrho will take board
control.
It is believed that significant operational and cost benefits to the Oceanfresh
business will accrue through access to the agri-processing, handling and
logistics network available within Lonrho Agriculture. Access to a competitive
corporate funding structure, removal of expensive factoring agreements and
access to working capital will improve margins and commercial opportunities.
The consideration paid by Lonrho for the 51% is a cash payment of R 3.8m (GBP
336,860) for the equity, to be reinvested in the business, and Lonrho will
arrange an initial working capital injection of R 7.7m (GBP 682,642) to grow the
business.
Loan facilities from former shareholders within Oceanfresh totalling R 9.5m (GBP
841,550) will be subordinated and interest free, repayable with no fixed term
based on a percentage of net profit achievement. Incentives and penalties
relating to net profit achievements have been included into the agreement with
the remaining minority shareholders together with commitments to further working
capital based on growth targets.
Oceanfresh reported turnover for the past twelve months of R 78m (GBP 6,900,000)
with an EBITDA of R 3.5m. (GBP 309.694)
David Lenigas, Lonrho Executive Chairman commented:
Lonrho is already active in the fish sector in South Africa and Namibia and sees
this as a market with strong growth potential in both Southern Africa and
internationally. The acquisition of 51% of Oceanfresh brings further skilled,
sector specific, human resources and important access to product to Lonrho. The
synergies between the existing Lonrho businesses and Oceanfresh should lead to
increased margins and will provide Oceanfresh with access to realistically
priced working capital enabling it to develop the business. The opportunities
are already in place to expand the business, and to provide access to the USA
marketplace for Lonrho`s fish lines and other Lonrho Agriculture products. .
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
David Armstrong, Finance Director +44 (0)7833 054 693
Pelham Bell Pottinger PR
Charles Vivian +44 (0) 20 7861 3126
+44 (0) 7977 297903
James MacFarlane +44 (0) 20 7861 3864
+44 (0) 7841 672 831
Beaumont Cornish Limited (Nomad)
Rosalind Hill Abrahams +44 (0) 20 7628 3396
Roland Cornish +44 (0) 20 7628 3396
7 June 2010
South African Sponsor
Java Capital
Date: 07/06/2010 14:16:01 Produced by the JSE SENS Department.
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