Lonrho Regulatory News (LONR)

10 Jul 2007 13:49

Lonrho PLC10 July 2007 LONRHO PLC ("Lonrho" or the "Company") ACQUIRES 45% OF SOUTH AFRICAN SHIPPING LINE Lonrho (AIM: LONR), the African conglomerate with a diverse portfolio ofinvestments ranging from infrastructure, transportation, support services andnatural resources, announces that it has acquired a 45% stake in SA IndependentLiner Services (PTY) LTD ("SAILS") for a total sum of US$6.0m. Lonrho also hasan option to acquire a further 6% stake in the company from existingshareholders over the next 5 years. The SAILS Operations SAILS is a ship operator and shipping line currently based in Cape Town, whichfocuses on shipping freight from South Africa to West Africa, Belgium, Germany,Holland and the UK. SAILS concentrates on containerised shipping and worksclosely with four strategic South African industries; motor manufacturing,chemicals, mining and agriculture. Each of these industries are largewater-based transport users. Current clients include world leading companies focusing on chemicalmanufacturing, food retailing, and transportation, Some of SAILS's largerclients are: • Sasol • Tesco • ZIM Line The SAILS fleet The SAILS fleet currently operate two sister ships, namely the 8,300 tonne MVBerta and 8,300 tonne MV Emilia. Both vessels have a carrying capacity of 650twenty foot containers (TEU) and onboard cranes suitable for small ports.Lonrho's investment will be used to expand the fleet to five vessels over thenext nine months. SAILS has been operating since March 2006 and has already secured US$20 millionworth of shipping contracts for the next twelve months for its two existingvessels. The additional vessels scheduled to join the fleet over the comingmonths will allow SAILS to add additional contracts and customers to next year'sorder book. The SAILS shipping routes The focus is to provide a regular, reliable scheduled service to West Africa,and Europe calling at - Durban, Port Elizabeth, Cape Town, Tema; Lagos,Rotterdam, Felixstowe, Bremerhaven and Antwerp. In the medium term SAILS isconstantly monitoring and assessing alternative trade routes, includingpotentially East Africa, looking to expand rapidly to support the needs of itsalready strong client base. South Africa has no commercially navigable rivers, but, capitalising on thecountry's two-ocean frontage, ocean shipping has long been a feature of itstransportation network. Approximately 98% of the country's exports are conveyedby sea. Containerised freight movements into and out of South Africa have beengrowing at more than 6% per annum for the past 10 years. The average annualgrowth rate from 2003 to 2006 was 12%. With West African connections developingsteadily and with the World Cup Football being hosted in South Africa in 2010,volumes are set to increase on a consistent basis. Container shipping remainsthe most efficient, viable and eco-friendly mode of transport for internationalfreight shipments. Ian Wicks will continue as the Managing Director of SAILS. Ian has 30 yearsexperience in the freight shipping and logistics industries. This deal builds on and strengthens Lonrho's interest in transport in Africa andtaps into an industry that will benefit greatly from increasing trade betweenAfrica and the rest of the world. David Lenigas, Lonrho's Executive Chairman and Chief Executive, commented: "We are delighted to announce this subscription for a substantial interest inSAILS. The company's operations connect Europe to Africa providing theopportunity to strengthen trade connections between the two continents. Thecompany has an experienced management team and a blue chip client base and weare excited at the future growth prospects of the company. Amongst others, theZIM Line contracts (the world's 10th largest shipping line), demonstrates theconfidence that the market has in the future of SAILS" "SAILS joins Fly 540, Norse Air and Lonrho Air, as part of Lonrho'stransportation division and this acquisition is another example of Lonrho'sstrategy of supporting African infrastructure. We believe that by investing intransportation and related companies, international and national trade willgrow, living standards will improve, and a substantial difference will be madein Africa." Ian Wicks, SAILS Managing Director, commented: "The subscription by Lonhro signals a new chapter in the development of SAILS.This is an age old industry and the links and support that SAILS has developedin its first year of operation will definitely grow and expand in the next twoto three years. As a regular independent operator we have already made hugestrides towards achieving our goals." 10 July 2007 Enquiries: For further information, please contact: Lonrho Africa Plc +44 (0) 20 7016 5105David Lenigas, Chief Executive +44 (0)7881 825 378Emma Priestley, Executive Director +44 (0)7867 785 177 Pelham PRCharles Vivian +44 (0) 20 7743 6672 +44 (0) 7977 297 903Candice Sgroi +44 (0) 20 7743 6376 +44 (0) 7894 462 114 Notes to Editors: About SAILS SAILS is a young South Africa based container shipping line, offering a viablealternative service to Exporters and Importers on the Europe, West African andSouth African trade routes. In an industry dominated by major players SAILS hasshown how attention to clients needs creates a platform for success. SAILS isstrategic to the infrastructural development of the African continent, currentlyserviced only by global shipping lines, whose priorities are on other traderoutes. About Lonrho: Lonrho Plc is an expanding conglomerate that is rapidly growing a successfulbusiness throughout Africa. The Company is listed on the London AIM stockexchange (LONR). Lonrho is strategically focused on the development of businessopportunities in infrastructure, transportation, support services and naturalresources. The Company has over 20,000 shareholders and substantialinstitutional backing to support its mandate to build a profitable business thatplays a fundamental role in the development of the African economy. Since 2006, the Company has invested in or acquired control of: Hotel Cardoso - www.hotelcardoso.co.mz (retained) Nare Diamonds - www.narediamonds.com Brinkley Mining - www.brinkley-mining.com Luba Freeport - www.lubafreeport.com Fly540 - www.fly540.com Norse Air - www.norseair.co.za Swissta Holdings - www.swissta.com Countermine plc - www.countermine.com This information is provided by RNS The company news service from the London Stock Exchange