8th Feb 2006 07:01
Lonrho Africa PLC08 February 2006 8 February 2006 Lonrho Africa Plc ("Lonrho Africa" or "the Company") Proposed change in strategy and grant of share options As reported in June 2005 in the Company's interim results, the Board has beenfollowing a strategy of disposing of the Company's residual assets in Africawhilst continuing to seek opportunities to maximise shareholder value. Followingthe completion on 12 May 2005 of the disposal of the Group's 100 per cent.interest in Lonrho Hotels Kenya BV for a cash consideration of £17.05 million("the LHKBV Sale"), the majority of the Company's assets have now been sold andits disposal programme substantially completed. Accordingly, the Board believesthat following the LHKBV Sale, Lonrho Africa has effectively become an investingcompany in accordance with the AIM Rules of the London Stock Exchange. TheCompany's remaining assets principally comprise of a 59 per cent. shareholdingin Hotel Cardoso SARL in Mozambique and an industrial property in South Africa(the "Residual Assets") and cash resources of approximately £20 million. Further to the appointment of David Lenigas as Chief Executive Officer on 21December 2005, the Board has been considering a suitable investment strategy tobe adopted by the Company and has held discussions with a number of LonrhoAfrica's major shareholders in this regard. The Board has concluded that itwould be in the best interests of shareholders at this time to use the Company'sstrong cash position to re-establish a significant presence in the continent ofAfrica by investing in entities operating in a broad range of sectors. It is intended that the Company will continue to seek to complete the disposalof its Residual Assets and that, subject to the approval of shareholders, theprincipal business and investing strategy of the Company will become the makingof strategic investments in entities with operations or assets located in Africain order to achieve future growth in shareholder value. Whilst Lonrho Africawill have no sector specific investment criteria, it is the Board's presentintention to focus on making investments in the natural resources andinfrastructure sectors, which are areas where David Lenigas has considerableexperience, and to also consider investment opportunities in Lonrho Africa'shistoric sectors of operation being motor dealerships/distributors,agribusiness, distribution, textiles, property and construction and hotels.Within natural resources, investments will initially be considered inexploration or development stage undertakings or in producing assets, andsuitable activities will include the mining of advanced precious metals or basemetals and energy related projects such as uranium, oil and gas. The Company will seek to acquire or make investments in either quoted or privatecompanies, partnerships, joint ventures or direct interests in projects. TheBoard would prefer that investments are initially represented by substantialshareholdings in investee companies to maximise the potential of returns toshareholders. However, investment opportunities will be considered on acase-by-case basis and minority interest investments will not be ruled out. TheCompany may seek to appoint one or more directors to the board of investeecompanies to represent its interests on a case-by-case basis. Where aninvestment represents less than 30 per cent. of an investee company's issuedshare capital it is intended that Lonrho Africa will primarily be a passiveinvestor and may seek board representation but only in a non-executive capacity.If an interest of more than 30 per cent. is acquired, the Company will adopt amore active role and accordingly seek board representation in an executivecapacity. The Directors will continue to review the composition of the Company's Board, inparticular once shareholder approval has been received for the proposedinvesting strategy, with further executive and/or non-executive directors beingappointed as appropriate. The Directors believe that it is important thatdirectors and employees of the Group are appropriately and properly motivatedand rewarded. Accordingly, subject to the approval of shareholders, it isproposed that 1,000,000 options be granted to Michael Wilson and 500,000 optionsbe granted to Richard Wilkinson at an exercise price of 17p per ordinary shareof 1p each in the capital of the Company. As the Company is currently in a closeperiod, such grant of options will take place as soon as practicable followingthe publication of Lonrho Africa's forthcoming annual results for its year ended30 September 2005. A letter containing further details of the proposed investment strategy and anotice convening an Extraordinary General Meeting to be held at 11.00 a.m. GMTon Friday, 24 February 2006 is today being sent to shareholders, at whichresolutions will be proposed seeking shareholders' approval for both theadoption of the investment strategy by the Company and for the grant of shareoptions to certain of your Directors. Commenting on the proposed change in strategy, David Lenigas said: "Africa as a whole now appears to be gaining renewed international investorinterest and we feel that it is time for Lonrho Africa to use its good name tomake a difference to African business and development. I trust that shareholderswill be as excited about the Company's future as the Board is and would welcometheir continued support in pursuit of our new strategy for the growth of theCompany." Enquiries: David LenigasLonrho Africa PlcTel: +44 (0) 7881 825 378 Nadja Vetter/Emma ConsettCardew GroupTel: +44 (0) 20 7930 0777 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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