22nd Jun 2007 09:22
Lonrho PLC22 June 2007 22 June 2007 LONRHO PLC ("Lonrho" or the "Company") LONRHO AIR ACQUIRES TWO ATR 42-320 AIRCRAFT FOR FLY540 Lonrho (AIM: LONR), the African conglomerate with a diverse portfolio ofinvestments ranging from infrastructure, transportation, support services andnatural resources, announces that it has acquired two French made ATR 42-320turbo-prop 42 seat passenger aircraft through its subsidiary Lonrho Air (B.V.I.)Ltd ("Lonrho Air") for a total sum of $6.29m. Simultaneously, Lonrho Air has entered into a back-to-back lease purchaseagreement with Five Forty Aviation Limited ("Fly540"), Lonrho's 49% ownedsubsidiary, which operates low cost flights in East Africa, whereby the aircraftare leased on a dry lease basis to Fly540 . This lease provides Lonrho Air withannual cash flows of $1.32 million. IBA Group Limited, who assisted with due diligence and have been retained toprovide technical asset management services to Lonrho Air, have given amaintenance adjusted value for the aircraft of $7.5m, a premium on cost price of$1.21 million. The ATR range of aircraft is known for their versatility and capability tooperate even in difficult environments and from short airfields. ATR iscurrently the most widespread regional aircraft type with more aircraft inservice with more operators than any competitor. Low weights, along with anadvanced aerodynamic design and highly efficient engines, makes these aircraftextremely efficient for a low cost operator. Low fuel consumption associatedwith high tank capacity ensures excellent range characteristics and thecapability to fly multiple sectors without refueling. The excellent landing andtake-off performance enable ATR aircraft to use the shorter runways set asidefor commuter operations at many airport hubs. All these characteristics makethe ATR an ideal aircraft for operating in Africa. This deal ensures the long term availability of good quality aircraft for Fly540assisting in their plans to expand routes into the East Africa region. Fly540have grown from strength to strength since their first flight in November 2006demonstrating the demand for low budget air travel in East Africa and thepotential that this market offers. The rapidly increasing demand for suchservices makes this a high growth area of business aligning it with Lonrho'srenewed strategic focus. David Lenigas, Lonrho's Executive Chairman and Chief Executive, commented: "Lonrho Air has been established to support and supply aircraft to the LonrhoPlc aviation subsidiaries and grow Lonrho's interests in this sector throughoutAfrica. These ATR's will be operated from Nairobi by Lonhro's subsidiaryFly540. The speed at which this carrier has grown demonstrates the potential ofthe domestic and regional carrier market in Africa. This reinforces the LonrhoBoard's belief that well managed, quality local airlines servicing Africa from aseries of central hubs is a highly profitable business model. The conceptinteracts ideally with the stated aims of international carriers such as BA andVirgin who in today's markets only wish to serve the largest internationalairports in Africa. Enquiries: Lonrho +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 903Alisdair Haythornthwaite +44 (0) 20 7743 6676 +44 (0) 771 472 1379 Notes to Editors: About Fly540 Fly540 introduced its first service to Mombasa seven months ago on 24 November,2006 and was well received by both business and leisure travellers. The airlinehas since added a further three destinations including Malindi, Lamu and Kisumuand is the pioneering low cost air carrier in East Africa. The airline intendsto expand to international destinations towards the end of 2007 to include aminimum of three other regional destinations in East Africa and a further fourin 2008. 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.comBrinkley Mining - www.brinkley-mining.comLuba Freeport - www.lubafreeport.comFly540 - www.fly540.comNorse Air - www.norseair.co.zaSwissta Holdings - www.swissta.comCountermine plc - www.countermine.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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