12th May 2006 10:00
Lonrho Africa PLC12 May 2006 LONRHO AFRICA PLC ("Lonrho Africa" or the "Company") LONRHO AFRICA ACQUIRES 63% OF LUBA FREEPORT IN EQUATORIAL GUINEA Lonrho Africa announces that it has acquired 63% of the issued share capital ofLuba Freeport Limited ("Luba Freeport") located in Equatorial Guinea ("EG") fora cash consideration of US$2 million. The balance of the share capital will beheld by the EG Government. As part of the acquisition, Lonrho Africa has alsoagreed to acquire secured debt of approximately US$11.3 million from AmeradaHess, a major client of Luba Freeport. Lonrho Africa will assume control of theLuba Freeport Board and David Lenigas will become Chairman. In recent years, Luba Freeport has established a reputation within the WestAfrican region as an efficient and cost effective Freeport. The Port acts as alogistics centre for the burgeoning oil and gas industries in the Gulf of Guineaand services major oil companies in the region. As part of the transaction,Lonrho Africa has agreed with the EG Government to maintain the overalldevelopment programme for the Port facilities. Its major contracted clients include: Amerada Hess, Mobil Equatorial Guinea,Baker Hughes, Marathon, LOTEG, Schlumberger, Nalco, SBM, Chevron Texaco, DevonEnergy, Petronas, Noble Energy and MI Equatorial Guinea. Luba Freeport, which provides a sheltered deep water environment, was awarded a25-year concession by the EG Government with two 5-year extension options. In2003, the EG Prime Minister signed a concession confirming the status of thePort as a Tax Free Zone in respect to custom duties on material imported intothe zone and in transit for countries outside of Equatorial Guinea. This TaxFree status and its central geographical location make Luba Freeport a uniquechoice for a West African regional hub. In a letter sent to Lonrho Africa, the EG Prime Minister stated that LubaFreeport was of vital importance and gave an assurance of the EG Government'son-going support to Lonrho Africa and the development of the Luba Freeport. David Lenigas, Lonrho Africa's Chairman and Chief Executive, commented: "Luba Freeport is being established as a 'One Stop Shop' for oil logistics inone of the fastest growing oil producing areas in the world. As development ofthe oil industry continues throughout the Gulf of Guinea and West Africa, moreand more companies will be on the lookout for logistical support for their oilindustry requirements. "Luba Freeport will be providing a substantial boost to the local economieswhilst at the same time offering a modern world-class facility for its clients.This investment in the Luba Freeport development project is an excitingopportunity for Lonrho Africa and is in line with the Company's strategy ofre-establishing itself as a major investor on the African Continent." Luba Freeport Phase 1 Development • In July 1999, the EG Government awarded a 25-year concession agreement, including 50 hectares of land for the development of a Freeport and oil services logistics base. • In January 2002, a contract was signed with Triton/Amerada Hess for the development of a 50,000 square metre facility which included warehouses and offices, a covered pipe inspection area, a storage area for well heads, a chemical storage area and an API specification pipe yard. • The Triton/Amerada Hess facility was completed in March 2003 following the construction of a 110 metre waterfront quay. Phase 2 Development • On 21 June 2003, the EG Government awarded a new 25-year concession to Luba Freeport Limited, a Jersey registered private company. • Bulking facilities for MI Equatorial Guinea were completed in October 2004. This enabled the supply of brine, barite, bentonite, oil based mud and chemicals across the quay. • Construction of the Schlumberger bulking facility was completed in January 2005. This allowed for the supply of drilling cement across the quay. • Phase 1 of the LOTEG tank farm was completed in February 2005. The present capacity of the tank farm provides for the storage of 20,000 metric tonnes of fuel and 1,000 metric tonnes of oil. • A contract was signed with Baker Hughes in early 2006 for a 10,000 square metre facility including office block, warehouse, tool shop and bulk storage facility. This facility will supply bulk chemicals and drilling tools for the offshore oil drilling industry. • A long-term contract has been signed with Mobil Equatorial Guinea for the construction of a 60,000 square metre lay down area which will include a 2,500 square metre warehouse and office facility, a 2,000 square metre marine hose storage shed, pipe inspection shed and wash bay. • A 70 metre quay extension is planned for 2006 with an additional 110 metres planned for 2007. Future Development • Longer term plans include the development of an additional 350 metres of quay and the installation of a regional waste management facility for the storage and treatment of offshore drill cuttings, whilst continuing to attract new long and short term clients to Luba Freeport. For more information on Luba Freeport please visit www.lubafreeport.com. End For further information, please contact: Lonrho Africa Plc +44 (0)2070 165 100David Lenigas - Executive Chairman +44 (0)7881 825 378Emma Priestley - Executive Director +44 (0)7867 785 177 Luba Freeport Limited +240 097078Howard McDowall - Director and General Manager +240 250774 Strand Partners Limited +44 (0)20 7409 3494Simon Raggett +44 (0)7769 883 666 Cardew Group +44 (0)20 7930 0777Nadja Vetter +44 (0)7941 340 436Eden Mendel +44 (0)7887 676 603Emma Consett +44 (0)7971 468 308 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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