1st Jul 2009 15:35
1st July 2009
LONRHO PLC
("Lonrho" or the "Company")
Lonrho's Fly540 to commence flights in Zimbabwe
Lonrho Plc ( AIM : LONR ) is pleased to announce that LonZim Plc ( in which it holds 24.53% ) is to commence operations for a Fly540 airline based in Zimbabwe to service both the domestic and regional markets and emerging local and connecting traffic. Flights are scheduled to start from September 2009.
Fly540 is a Lonrho Plc owned airline operating in Africa and to international standards. Fly540 is being rolled out across Africa with local partners in each country, to service the domestic and regional African markets. The company provides local and regional distribution for international flights coming into Africa with a safe, reliable and punctual service. Fly540 is building a unique African airline connecting Africa north to south and east to west. ( www.fly540.com )
Fly540 Zimbabwe will deliver affordable air links to key domestic and regional cities from a Harare hub and will be an integral part of the Fly540 network that will be flying in nine African countries by the end of 2009.
The launch of Fly540 Zimbabwe is also central to LonZim's investment strategy of identifying current market opportunities in Zimbabwe and establishing companies that will benefit from the economic recovery of the country. The potential aviation market on a domestic and regional basis is significant and currently underserved. For Zimbabwe to rebuild its economic base and attract investment it is essential that it has a first world transport capability. Having observed the market opportunity for over a year, Fly540 believes that now is the right time to commence operations.
LonZim Air, a wholly owned subsidiary of LonZim plc, has invested US$ 200,000 in the acquisition of 90% of Zimbabwe company Sol Air ( private ) Limited. Fly540 Zimbabwe has now obtained the necessary Air Services Licence and following completion of the arrangements with Lonrho's Fly540 it will be possible for Fly540 Zimbabwe to finalise the necessary permissions to operate. A further US$ 4.3 million ( resulting from an independent valuation) will be invested in acquiring an ATR 42 turbo prop from the Lonrho Aviation fleet, and US$ 2.0 million for the operational costs associated with commencing operations and a working capital provision of US$ 3.9 million for the first twelve months. This capability will be complemented by a freight service. Fly540 Africa ( BVI ) will receive US$ 100k to initiate flight operations in Zimbabwe, and thereafter a license fee of 2.5% of gross turnover and a monthly management fee of US$ 35,000 for managerial services.
Fly540 Zimbabwe will operate the 'low cost' airline from Harare International Airport and is scheduled to open flights to Bulawayo and Victoria Falls on a domestic basis and Lubumbashi; Lilongwe; Lusaka; and Beira on an international basis. Once established, the route network will be expanded.
The agreements between Fly540 Africa (BVI), a wholly owned subsidiary of Lonrho plc and LonZim Air (BVI), a wholly owned subsidiary of LonZim plc,to acquire the ATR42 aircraft and enter into the Fly540 license agreement and management agreementhave been treated by Lonrho Plc as a related party transaction under the AIM Rules for Companies. The disposal price of the aircraft is approximately equal to the current book value in the Lonrho accounts and the proceeds will be used for additional working capital for the ongoing growth of Fly540. The Lonrho independent directors who are not directors of LonZim Plc being David Armstrong, Donald Strang and Frances Cook) consider, having consulted with the Company's nominated adviser Beaumont Cornish Limited, the contracts to be fair and reasonable in so far as shareholders are concerned.
David Lenigas, Executive Chairman of LonZim stated:
"We are delighted to be able to launch Fly540 in Zimbabwe. Not only does it make sound commercial logic, but it is an important step forward for Zimbabwe and helps stimulate economic recovery. Good transport networks are essential for the growth of Africa, and Fly540 is delivering an international standard, quality aviation service connecting the continent."
Enquiries
|
Lonrho Plc |
|
|
David Lenigas, Executive Chairman |
+44 (0)20 7016 5105 |
|
Geoffrey White, Chief Executive Officer |
+44 (0)20 7016 5105 |
|
David Armstrong, Finance Director |
+44 (0)20 7016 5105 |
|
Emma Priestley, Executive Director |
+44 (0)20 7016 5105 |
|
|
|
|
Pelham PR |
|
|
Charles Vivian |
+44 (0) 20 7337 1538 |
|
|
+44 (0) 7977 297903 |
|
James MacFarlane |
+44 (0) 20 7337 1527 |
|
|
+44 (0) 7841 672831 |
|
|
|
|
Beaumont Cornish Limited (NOMAD) |
|
|
Rosalind Hill Abrahams |
+44 (0) 20 7628 3396 |
|
Roland Cornish |
+44 (0) 20 7628 3396 |
Related Shares:
Lonrho