Cambria Africa Regulatory News (CMB)

17 Apr 2009 16:12



Date 17th April 2009

LonZim Plc

("LonZim" or the "Company")

LonZim buys Leopard Rock Hotel in Zimbabwe

LonZim Plc (AIM: LZM) which was established for the principle purpose of making investments in Zimbabwe and the Beira corridor in Mozambique, is pleased to announce that it has acquired the Leopard Rock Hotel in Zimbabwe via the acquisition of the issued share capital of the holding companies that together own the Leopard Rock Hotel Company (Pvt) Ltd. One of the best known hotels in Zimbabwe, and one of the best known in the Southern African region, the Leopard Rock Hotel is set in the scenic Vumba Mountains 32km from Mutare and approximately 220km South East of Harare. The hotel is located in an area of outstanding national beauty in the Eastern Highlands of Zimbabwe, a well know tourist destination in the country.

The hotel's championship golf course is hailed as one of the finest in Africa and has won numerous accolades and is a major attraction for the hotel. A private game farm provides further facilities for this unique resort. The hotel also operates a Casino which is fully integrated into the hotel.

The hotel consists of 49 double rooms, one single room and eight suites with the ability to accommodate 115 guests. The hotel facilities and amenities include restaurants, conference facilities, swimming pool, squash court, all weather floodlit tennis courts, gymnasium, sauna and children's play area and a private game reserve. 

The hotel is highly regarded in Zimbabwe and internationally, with an impressive history of accommodating VIP guests and hosting significant events. Royal Guests have included Princess Diana in 1995 and Her Royal Highness Queen Elizabeth the late Queen Mother. The hotel, casino, golf course, game park and their ancillary and associated assets have been purchased for a total consideration of US$ 8.5 million, payable from the Company's existing cash reserves.

An immediate renovation programme ( budgeted at US$1.7million and available from LonZim's current cash reserves ) will be implemented to bring the hotel back to the highest international standards. The hotel has suffered from the recent economic hyperinflationary environment. However, with the recent US dollarization of the Zimbabwe economy and the commercial stability this is delivering, it is expected that the hotel can trade profitably. Previously the hotel enjoyed occupancy levels of approximately 70% and LonZim believes that these will be achievable following the renovation programme and the restoration of the Zimbabwean tourist industry.

As and when the LonZim Board conclude that the potential market for the hotel justifies it, the plan will be to develop a further 100 rooms at the property, and ensure that the accommodation capacity within the hotel complex is sufficient to attract major international golf tournaments. 

The hotel has operated as a commercial enterprise on an undisturbed basis in its current format for fifteen years. The hotel, golf course and game park are situated in the Eastern Highlands of Zimbabwe and are surrounded by rural land. Rural land in Zimbabwe may be subject to compulsory acquisition under current laws. This risk was highlighted in the risks section of the Company's AIM Admission document 

David Lenigas, LonZim Executive Chairman, stated :

"The Leopard Rock Hotel is one of Africa's most famous grand hotels and will be instrumental in the economic recovery of Zimbabwean tourism in the years to come.

The acquisition of the hotel, located in the Eastern Highlands, enhances LonZim's hotel strategy for Zimbabwe complementing our purchase last year of the prime hotel site on the coast in Beira; and our proposed 5 star property, 'The Leopard', in Harare. These in conjunction with plans for a 'Leopard Lodge' property at the Victoria Falls will provide LonZim with a geographically spread portfolio to service all of the wider Zimbabwe tourism market."

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