| Wed 8 Feb 2006, 9:00 | | Lonrho Africa Plc - Proposed Change In Strategy An |
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LAF
LOLAF
Lonrho Africa Plc - Proposed Change In Strategy And Grant Of Share Options
Lonrho Africa Plc
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF; ISIN number: GB0002568813)
("Lonrho Africa" or "the Company")
PROPOSED CHANGE IN STRATEGY AND GRANT OF SHARE OPTIONS
As reported in June 2005 in the Company"s interim results, the Board has been
following a strategy of disposing of the Company"s residual assets in Africa
whilst continuing to seek opportunities to maximise shareholder value. Following
the completion on 12 May 2005 of the disposal of the Group"s 100 per cent.
interest in Lonrho Hotels Kenya BV for a cash consideration of GBP17.05 million
("the LHKBV Sale"), the majority of the Company"s assets have now been sold and
its disposal programme substantially completed. Accordingly, the Board believes
that following the LHKBV Sale, Lonrho Africa has effectively become an investing
company in accordance with the AIM Rules of the London Stock Exchange. The
Company"s remaining assets principally comprise of a 59 per cent. shareholding
in Hotel Cardoso SARL in Mozambique and an industrial property in South Africa
(the "Residual Assets") and cash resources of approximately GBP20 million.
Further to the appointment of David Lenigas as Chief Executive Officer on 21
December 2005, the Board has been considering a suitable investment strategy to
be adopted by the Company and has held discussions with a number of Lonrho
Africa"s major shareholders in this regard. The Board has concluded that it
would be in the best interests of shareholders at this time to use the Company"s
strong cash position to re-establish a significant presence in the continent of
Africa by investing in entities operating in a broad range of sectors.
It is intended that the Company will continue to seek to complete the disposal
of its Residual Assets and that, subject to the approval of shareholders, the
principal business and investing strategy of the Company will become the making
of strategic investments in entities with operations or assets located in Africa
in order to achieve future growth in shareholder value. Whilst Lonrho Africa
will have no sector specific investment criteria, it is the Board"s present
intention to focus on making investments in the natural resources and
infrastructure sectors, which are areas where David Lenigas has considerable
experience, and to also consider investment opportunities in Lonrho Africa"s
historic sectors of operation being motor dealerships/distributors,
agribusiness, distribution, textiles, property and construction and hotels.
Within natural resources, investments will initially be considered in
exploration or development stage undertakings or in producing assets, and
suitable activities will include the mining of advanced precious metals or base
metals and energy related projects such as uranium, oil and gas.
The Company will seek to acquire or make investments in either quoted or private
companies, partnerships, joint ventures or direct interests in projects. The
Board would prefer that investments are initially represented by substantial
shareholdings in investee companies to maximise the potential of returns to
shareholders. However, investment opportunities will be considered on a case-by-
case basis and minority interest investments will not be ruled out. The Company
may seek to appoint one or more directors to the board of investee companies to
represent its interests on a case-by-case basis. Where an investment represents
less than 30 per cent. of an investee company"s issued share capital it is
intended that Lonrho Africa will primarily be a passive investor and may seek
board representation but only in a non-executive capacity. If an interest of
more than 30 per cent. is acquired, the Company will adopt a more active role
and accordingly seek board representation in an executive capacity.
The Directors will continue to review the composition of the Company"s Board, in
particular once shareholder approval has been received for the proposed
investing strategy, with further executive and/or non-executive directors being
appointed as appropriate. The Directors believe that it is important that
directors and employees of the Group are appropriately and properly motivated
and rewarded. Accordingly, subject to the approval of shareholders, it is
proposed that 1,000,000 options be granted to Michael Wilson and 500,000 options
be granted to Richard Wilkinson at an exercise price of 17p per ordinary share
of 1p each in the capital of the Company. As the Company is currently in a close
period, such grant of options will take place as soon as practicable following
the publication of Lonrho Africa"s forthcoming annual results for its year ended
30 September 2005.
A letter containing further details of the proposed investment strategy and a
notice convening an Extraordinary General Meeting to be held at 11.00 a.m. GMT
on Friday, 24 February 2006 is today being sent to shareholders, at which
resolutions will be proposed seeking shareholders" approval for both the
adoption of the investment strategy by the Company and for the grant of share
options to certain of your Directors.
Commenting on the proposed change in strategy, David Lenigas said:
"Africa as a whole now appears to be gaining renewed international investor
interest and we feel that it is time for Lonrho Africa to use its good name to
make a difference to African business and development. I trust that shareholders
will be as excited about the Company"s future as the Board is and would welcome
their continued support in pursuit of our new strategy for the growth of the
Company."
Enquiries:
David Lenigas
Lonrho Africa Plc
Tel: +44 (0) 7881 825 378
Nadja Vetter/Emma Consett
Cardew Group
Tel: +44 (0) 20 7930 0777
8 February 2006
South African sponsor to Lonrho Africa Plc
Java Capital (Pty) Limited
Date: 08/02/2006 09:00:11 AM Produced by the JSE SENS Department
