| Wed 13 Jun 2012, 8:05 | | LAF - Lonrho Plc - To list its aviation division on The London Stock Exchange to |
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LAF
LOLAF
LAF - Lonrho Plc - To list its aviation division on The London Stock Exchange to
create "Fastjet", an African low cost Airline, in conjunction with Sir Stelios
Haji-Ioannou and Easygroup
LONRHO PLC
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF; ISIN number: GB0002568813)
("Lonrho" or "the Company")
LONRHO PLC TO LIST ITS AVIATION DIVISION ON THE LONDON STOCK EXCHANGE (AIM) TO
CREATE "FASTJET", AN AFRICAN LOW COST AIRLINE, IN CONJUNCTION WITH SIR STELIOS
HAJI-IOANNOU AND EASYGROUP
Lonrho Plc is pleased to announce that it has agreed to dispose of its aviation
business, Lonrho Aviation, to Rubicon Diversified Investments Plc, an AIM listed
investment company ("Rubicon", LN: AIM : RUBI) (the "Transaction"). The total
consideration for the Transaction payable to Lonrho is USD85.7m, consisting of
1,150,537,455 Rubicon ordinary shares calculated at a notional value of 4.8
pence per Rubicon ordinary share. Lonrho currently holds 9,500,000 ordinary
shares in Rubicon and, as a result of the Transaction, the Company`s enlarged
shareholding in Rubicon on completion of the Transaction ("Completion") will be
1,160,037,455 ordinary shares, comprising 73.7% of Rubicon`s enlarged issued
share capital. The General Meeting of Rubicon`s shareholders, for the purpose of
approving the Transaction, has been convened for the 29th June 2012.
As part of the Transaction, Sir Stelios Haji-Ioannou`s easyGroup Holdings
Limited ("easyGroup") will own 5% of the ordinary share capital of Rubicon, as
enlarged by the Transaction. Following Completion Rubicon will pursue a
strategy of developing a low cost African airline utilising the Lonrho Aviation
route network and existing platforms. Under a licensing agreement with
easyGroup, the airline will be branded FastJet and will use modern jet aircraft
and operate to European standards.
The background to the Transaction is the completion earlier this year of
Lonrho`s four year programme of developing operational hubs in East, West and
South West Africa for Lonrho Aviation. Lonrho Aviation`s strategic hubs operate
in Kenya, Tanzania, Ghana and Angola, providing an unparalleled route network
and operating platform to launch across Africa.
In addition to the partnership with easyGroup, a key benefit of the Transaction
to Lonrho is the substantial cash resources held by Rubicon (GBP8.8m as at 31
December 2011) which will be available for continued investment in the airline
business following Completion. Fastjet will focus on developing a true low cost
airline for Africa based on the existing Lonrho Aviation platform which, in its
existing operations as Fly540, had turnover of USD57 million and carried 525,375
passengers in the 15 months to 31st December 2011. Passenger loads continue to
increase with Fly540 carrying 53,225 for the month of May 2012.
The population in Africa has now reached one billion people and the
strengthening emerging economies across the Continent are building a significant
demand for regional aviation services. Seven of the World`s top ten fastest
growing economies are now in Africa. GDP and consumer spending is rising and the
rapidly increasing numbers of intercontinental flights that are flying into
Africa create an increasing demand for regional African travel.
As part of the agreement between easyGroup and Rubicon, easyGroup will have the
right to appoint two directors to the Rubicon Board. It is intended that one of
the easyGroup appointments will be Mr Ed Winter who would become CEO following
Completion. Ed Winter launched and was the CEO of the low cost carrier GO for
British Airways and thereafter became the COO of easyJet. Sir Stelios Haji-
Ioannou has the right to be personally appointed to the Rubicon Board as the
other easyGroup board representative following Completion. David Lenigas and
Geoffrey White will remain on the board of Rubicon.
As at 31 December 2011, Lonrho Aviation, operating as Fly540, had Total Assets
of USD 83.5 million and in the 15 months to December 2011 made a loss after tax
of USD 19.0 million. The majority of these losses were predominantly due to the
start-up and establishment costs of opening the Angola and Ghana operational
hubs.
The Rubicon shares received by Lonrho as consideration for the disposal will be
subject to a 12 month lock in period, during which time Lonrho cannot sell or
transfer such shares. Whilst Lonrho owns more than 50% of Rubicon`s ordinary
shares, both Rubicon and the aviation business will be consolidated in Lonrho`s
accounts.
The Takeover Panel has agreed, subject to the passing of the required
resolutions at the Rubicon General Meeting on 29th June 2012, to waive the
obligations on Lonrho and its concert party members, under Rule 9 of the
Takeover Code, to make a general offer for the entire share capital of Rubicon.
David Lenigas, Executive Chairman of Lonrho commented:
"Lonrho has completed its investment programme into its aviation division and
has successfully created a unique aviation network in Africa. The next step in
the growth of the business requires a World class aviation team to develop the
business to meet the growing demand for a scheduled regional airline in Africa.
I am delighted that Sir Stelios Haji-Ioannou and easyGroup have studied this
market and concluded that the Lonrho aviation division provides a unique entry
platform for the development of a true low cost carrier for Africa, to be
branded FastJet.
The combination of Lonrho`s experience in Africa; the aviation experience of Sir
Stelios Haji-Ioannou and easyGroup; the route network and operations already
established by Lonrho Aviation across Africa and Rubicon`s cash resources will
enable Fastjet to quickly develop its low cost airline."
Enquiries:
Lonrho Plc +44 (0) 20 7016 5105
David Lenigas
Geoffrey White
David Armstrong
FTI Consulting +44 (0) 20 7831 3113
Edward Westropp
Georgina Bonham
13 June 2012
South African sponsor
Java Capital
Date: 13/06/2012 08:05:01 Produced by the JSE SENS Department.
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