Cambria Africa Regulatory News (CMB)

29 Jun 2009 14:12



29th June 2009

LonZim plc

("LZM" or "the Company")

Refurbishment of Leopard Rock Hotel in Zimbabwe

LonZim ( AIM : LZM ) a company focused on investing in Zimbabwe to support and benefit from economic recovery is pleased to announce that it has appointed Lonrho Hotels to manage the refurbishment and operations of the iconic Leopard Rock Hotel in Zimbabwe. 

LonZim purchased the Leopard Rock hotel in April 2009 and at that time announced that the hotel would undergo a refurbishment program. Lonrho Hotels will project manage the refurbishment program, (estimated at a US$ 1.7million cost for the Company) with immediate effect. Lonrho Hotels will earn a fixed 6% management fee (US$ 102,000) for managing the refurbishment process. Lonrho Hotel will provide a detailed refurbishment program and budget for approval by the LonZim board. The refurbishment program is expected to take twelve months to complete and will bring the existing facilities back to an international five star standard. 

In addition to the refurbishment contract, Lonrho Hotels will, during the refurbishment period produce a development master plan for the property which is to be expanded. In addition to upgrading the existing 18 hole PGA championship golf course, hotel, casino and private game reserve, the master plan will review the options of adding a further 100 rooms of accommodation; a second 18 hole PGA standard golf course; an international polo club and a world class spa.

Following the completion of the refurbishment, Lonrho Hotels will commence a management contract for running the hotel where it will be paid 4% of gross turnover and 8% of operating profit. The management contract is for a period of ten years. The Leopard Rock Hotel will be included in the Lonrho Hotels Maestro global central reservation system.

The refurbishment and management contract between LonZim plc and Lonrho Hotels Management Services ltd, a wholly owned subsidiary of Lonrho plc, constitutes a related party transaction under the AIM Rules for Companies. The independent directors (Paul Heber and Paul Turner) consider, having consulted with the Company's nominated adviser WH Ireland Ltd, the contracts to be fair and reasonable in so far as shareholders are concerned. 

David Lenigas, LonZim Executive Chairman commented :

"The Prime Minister of Zimbabwe has identified tourism as one of the industry sectors that can recover first in Zimbabwe. The process of returning the Leopard Rock Hotel to its previous position as one of the leading hotels in Africa has now started and will provide Zimbabwe with a flagship property that is world class. We intend to hold a PGA golf tournament as soon as the refurbishment is completed to re-launch this very special hotel.

LonZim supports the development of quality hotels throughout the region, and with its previously announced development on the coast at Beira, Mozambique and the planned new five star Leopard Hotel in Harare, LonZim will have a unique geographical spread of hotels to serve the market."