Lonrho Regulatory News (LONR)

15 Jan 2008 07:00

LonZim PLC15 January 2008 15 January 2008 LONZIM PLC LonZim acquires holding in Blueberry International Services Limited from Lonrho Plc. LonZim Plc ("LonZim" or the "Company"), which has been established for theprincipal purpose of making investments in Zimbabwe, announces that it hasacquired an 80 per cent. shareholding (the "Blueberry Shares") in BlueberryInternational Services Limited ("Blueberry") from Lonrho Plc ("Lonrho") for£2.431m in cash and payment of a deferred consideration of US$0.908m to be madeto the original owners of Blueberry (the "Deferred Consideration"). The remaining 20 per cent. of Blueberry is owned by Coast2Coast CommunicationsInvestments (Pty) Limited ("Coast2Coast"). As part of the acquisition of theBlueberry Shares, LonZim has entered into a 'put and call option' agreement withCoast2Coast (the "Option Agreement"). The option period runs from 1 October2008 to 1 October 2012. Under the put option LonZim can be required to acquirethe remaining 20 per cent in Blueberry at a price of US$1,362,500. Under thecall option LonZim can acquire the remaining 20 per cent in Blueberry at thesame price (or a higher price if agreed by LonZim and Coast2Coast or determinedby an independent chartered accountant). Blueberry is an offshore company incorporated in the British Virgin Islands that(i) controls 60 per cent. of Celsys Limited ( "Celsys" ), a Zimbabwean publiclylisted company operating in the telecommunications and security printing sector;and (ii) owns 100 per cent. of Gardoserve (Private) Limited ("Gardoserve"), aZimbabwean private industrial chemical manufacturer and distributer tradingunder the "Millpal" brand. This is the first acquisition by LonZim following the recent successfulfundraising of £29.16m (US$ 60 million) and admission to trading on the AIMmarket of the London Stock Exchange. LonZim will seek to invest in companies insectors best positioned to benefit should there be a radical improvement in theZimbabwe economy. At the time of the acquisition by Lonrho of the holding in Blueberry in October2007, Lonrho stated that the shareholding in Blueberry would be offered toLonZim at cost. The holding in Blueberry has been acquired by LonZim from Lonrhofor £2.431m, being the cash consideration paid by them of £2.247m (US$4.54m)together with the expenses incurred by Lonrho of £0.184m. In addition, theCompany has taken on responsibility for the payment of the DeferredConsideration. By way of novation of the original sale and purchase agreementunder which Lonrho acquired the shares in Blueberry, LonZim has taken on all therights and obligations of Lonrho as set out in the original sale and purchaseagreement. Gardoserve made a net profit of Z$247 million for the year ending December 2006(unaudited accounts) and Celsys made a net profit of Z$9.8 billion for the yearending June 2007 (audited accounts). The net asset balance of Celsys as at 30June 2007 was Z$22.4 billion. The unaudited net asset balance for Gardoserve asat 31 December 2006 was Z$493 million. The figures have been derived fromaccounts produced under the historical cost convention, however, as investorsare aware from the Company's Admission Document dated the 5th of December 2007,both companies operate in a hyper-inflationary environment subject to exchangerate fluctuations making their financial statements open to wide differences ininterpretation. The acquisition provides LonZim with a strategic position in two establishedZimbabwean industries and access to an experienced local management team whowill also be utilised to actively manage the operations of the companies inwhich the Company invests. As Lonrho is a substantial shareholder in the Company (owning 20 per cent. ofLonZim's share capital) and provides management support services to LonZim, itis classed as a related party for the purposes of the AIM Rules. Therefore, inaccordance with the Company's articles of association, David Lenigas, GeoffWhite, Emma Priestley and Jean Ellis (all of whom are directors of both Lonrhoand LonZim and are involved in this transaction as a related party) were notpermitted to vote or count towards the quorum of the LonZim board of directorswhen it considered the acquisition of the Blueberry Shares. The Company'sindependent director, Paul Heber, having consulted with the Company's nominatedadviser, Collins Stewart Europe Limited, considers that the terms of thetransaction are fair and reasonable insofar as the shareholders of LonZim areconcerned. Paul Heber, Non-Executive Director of LonZim stated: "This investment in Millpal and Celsys, a listed company on the Zimbabwe StockExchange, provides a perfect first step for LonZim to evaluate and structure itsproposed investment portfolio throughout Zimbabwe. We are reviewing proposals toexpand the current Celsys and Millpal operations and see current marketopportunities for both companies to develop" ENQUIRIES LonZim Plc +44 (0)20 7016 5105David Lenigas, Executive Chairman +44 (0)7881 825 378Geoffrey White, Executive Director +44 (0)7717 307 308Emma Priestley, Executive Director +44 (0)7867 785 177 Pelham PRCharles Vivian +44 (0) 20 7743 6672 / +44 (0) 7977 297903James MacFarlane +44 (0) 20 7743 6375 / +44 (0) 7841 672831 Collins Stewart Europe: Nomad to LonZimHelen Goldsmith +44 (0) 20 7523 8350 NOTES TO EDITORS Celsys Celsys was established in 1996 and listed on the Zimbabwe Stock Exchange in2003. It comprises four core and interlinked divisions: Celsys Comms; CelsysPrint; Celsys IT; and Celsys Marketing. The company is an important employerwith over 140 staff and plays a significant role in maintaining and growing theZimbabwean communications industry. Its core business is information and communications technology (ICT). CelsysComms comprises: The Comm Shop which sells and repairs cell phones and is thesole authorised Nokia Repair Centre in Zimbabwe; Celsys C-phone, a vibrantcommunity payphone project established four years ago, and Zimbabwe's dominantbrand in the payphone market. With its superior airtime tracking software andfully automated operation, C-Phone has created viable livelihoods for rural,peri-urban and urban Zimbabweans, providing a critical communications serviceinto Zimbabwe's rural areas. Celsys Print is Zimbabwe's largest independent printer of cheque books and othersecurity documents for banks and financial institutions, and is a major producerof cell phone recharge cards, recognised for its excellent quality and productdelivery. Celsys IT sells, operates and maintains ATMs and distributes Sophos IT securityproducts across sub Saharan Africa. Sophos is the internationally recognisedanti-virus, anti-spam and information technology security vendor, offeringtechnology security for businesses in over 150 countries. Celsys IT last yearacquired the operations of Hillside Technologies Southern Africa, an IT businessproviding software security to large businesses and banks, and with it, SophosMaster Distributor status. Gardoserve Gardoserve, trading as Millpal, has over 20 years experience selling chemicalsto the textile and raw materials chemical industry. Millpal continues tomanufacture and distribute chemicals, flavourants, and colourants in Zimbabweand for export to the metal treatment, textile, electroplating, epoxy andsolvent markets. --oo-- This information is provided by RNS The company news service from the London Stock Exchange