Lonrho Regulatory News (LONR)

9 Oct 2007 08:44

Lonrho PLC09 October 2007 9th October 2007 Lonrho Plc ("Lonrho" or "the Company") Lonrho signs agreement to establish it's regional airline, Fly540, in Angola Lonrho (AIM: LONR), the expanding conglomerate with a portfolio of Africaninvestments, is pleased to announce that it has signed an agreement that,subject to the approval of a final business implementation plan to be submittedshortly, will lead to the creation of a joint venture with GEFI, (Sociedade deGestao e Participacoes Financeiras SARL), one of the largest internalinvestment companies in Angola, to set up a new airline in Angola. The airline will be called 'Fly 540 Angola', and will replicate Lonrho'ssuccessful Fly 540 airline which is already established and operating in Kenya.Lonrho will utilise the skill and experience available within the existing Fly540 operation to rapidly develop the new airline to become a major market forcein Angola. GEFI, through its wholly owned aviation subsidiary, Planar, has provisionallyagreed to provide Planar's assets to the joint venture including a 1,000m2hangar; 400m2 of offices and a ticket office on a long term, peppercorn, rentalat 4th February International Airport, the main airport in Luanda. Planarcurrently hold an Air Services Licence which will be used for Fly540 Angola. It is planned to commence operations in the domestic market early in 2008.Initial deployment will be a combination of modern turboprops and regional jets,which will provide regular scheduled services to ten key locations withinAngola. The new airline will focus on quality, reliable passenger services andit is scheduled to be operating ten aircraft by the end of 2008. Freight and charter markets will also be developed concurrently with thepassenger market. The budget for establishing the company in year one has beencommitted at US$ 9.0 million, of which Lonrho will provide US$ 3.0 million withUS$ 6 million funded locally. Fly540 Angola will be defined as a 'strategic company' under Angolanlegislation, as a result of which 51% of the company will be held by GEFI and/orother Angolan partners. However, under the terms of the joint venture agreement,Lonrho will receive 60% of the profits of the business. Aviation services provide an essential means of transport in Angola, where thepopulation is very dispersed and the road and rail infrastructure cannot meetdemand. David Lenigas, Chairman and CEO of Lonrho commented: "The results of our market analysis show that the domestic market in Angolanaviation is growing at 20% per year and we also plan to commence internationalflights in due course. "This is a significant further step in establishing Fly540 as an integrated, panAfrican regional carrier of international standards. We expect Fly 540 to beflying in seven countries by the end of the first quarter of 2008." ENQUIRIES Lonrho 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 297903Alisdair Haythornthwaite +44 (0) 20 7743 6676 +44 (0) 7714 721379 Collins Stewart EuropeHugh Field +44 (0) 20 7523 8350Jonny Sloan NOTES TO EDITORS About GEFI: GEFI is one of the largest internal investment companies in Angola, withsuccessful joint ventures in more than forty companies in the industrial,services and financial sectors including CUCA (Angola's largest brewery), Portoperations with Maersk and in the financial sector with Banco Sol. 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• Luba Freeport - www.lubafreeport.com• Fly540 - www.fly540.com• Norse Air - www.norseair.co.za• Swissta Holdings - www.swissta.com• SA Independent Liner Services• Bytes and Pieces This information is provided by RNS The company news service from the London Stock Exchange