Maravi

(HERALD) Lonrho, Cambria in $2,9m spat over planes

Lonrho, Cambria in $2,9m spat over planes
Saturday, 09 June 2012 19:43
Darlington Musarurwa
Business Editor

Cambria Africa — formerly LonZim — is currently embroiled in a dispute with its major shareholder Lonrho over payment of insurance proceeds, outstanding lease payments and the condition of its two planes that were being operated by Fly540, a wholly owned subsidiary of Lonrho.

Lonrho has a 22,9 percent stake in the Zimbabwe-focused business entity. In its interim financials for the year ending February 29, Cambria Africa contends that it is owed in excess of $2,9 million for proceeds related to the lease of a Fokker F27-500 Cargo plane to 540 Uganda Limited in September 2008 and also the lease of the ATR 42-320 (ATR) to Five Forty Aviation Limited in July 2009.

A third aircraft, which was also leased by 540, was destroyed in an accident in January 2011.

In particular, the bulk of the money, about $2,3 million, is owed as lease and maintenance reserve payments and interest for the ATR plane, while $148 000 and $527 000 is believed to have accrued as insurance proceeds and related interest and lease and maintenance reserve payments for the F27 plane.
However, Lonrho claims that it doesn’t owe Cambria anything. Instead, it claims that the Alternative Investment Market (AIM) listed company has an obligation of $829 000

“although the basis for this has not yet been set out”.



Noted Cambria: “Cambria continues to own two aircraft through its subsidiary LonZim Air (B.V.I.) Limited: a Fokker F27-500 Cargo (F27) and an ATR 42-320 (ATR). The F27 was leased to 540 (Uganda) Limited in September 2008 and the ATR was leased to Five Forty Aviation Limited in July 2009. Both entities (collectively “540”) are, or are understood to be subsidiaries of Lonrho. A third aircraft leased by 540 was destroyed in an accident in January 2011. “A number of disputes have arisen in relation to these aircraft and associated contracts. These disputes relate, inter alia, to the payment of insurance proceeds, outstanding lease payments, maintenance reserves and the condition of the two remaining aircraft. Cambria considers that substantial sums are due from 540. 540 contends that no sums are due to Cambria and/or its associated companies and that, overall, it is owed approximately $829 000 in relation to the aircraft, although the basis for this has not yet been set out.



“Taking these matters into account Cambria has recognised a contingent asset of $2,9 million in relation to the aircraft and sums due from 540.
“In addition, Cambria’s short-term debtors include $1,3 million recorded in the books of LonZim Air (B.V.I.) Limited in relation to the above issues up to 31 August 2011.”
The dispute between the two companies seemingly reflects a growing rift between them.



During the first quarter of the year, LonZim decided to change its name to Cambria and indicated that it can operate without direct support from its major shareholder.
Board changes also followed as five members of the board nominated by Lonrho agreed to step down in February.
The directors were subsequently replaced with four new directors: Mr Ian Perkins, who was appointed as a non-executive chairman; Mr Edzo Wisman, appointed as executive director and chief executive officer, and Itai Mazaiwana and Fred Jones, who joined the board as non-executive directors. Mr Paul Turner became the company’s deputy chairman.



Initially, Lonrho, through the then LonZim, had intended to introduce operations for a Fly540 airline based in Zimbabwe to service both the domestic and regional markets and emerging local and connecting traffic.



Flights were scheduled to start from September 2009.
At the time, LonZim Air, a wholly owned subsidiary of LonZim plc, had invested $200 000 in the acquisition of 90 percent of Zimbabwe company Sol Air (Private) Limited, and Fly540 Zimbabwe had now obtained the necessary air services licence.



A further $4,3 million was also reserved for acquiring an ATR 42 turbo prop from the Lonrho Aviation fleet, and US$2 million for the operational costs associated with commencing operations and a working capital provision of $3,9 million for the first 12 months.
This capability was supposed to be complemented by a freight service.
In addition, Fly540 Africa (BVI) was supposed to receive $100 000 to initiate flight operations in Zimbabwe, and thereafter a licence fee of 2,5 percent of gross turnover and a monthly management fee of $35 000 for managerial services for the low-cost airline.



However, to date the airline has not taken to the skies.
On the overall, Cambria, which has five core businesses in Zimbabwe — Leopard Rock Hotel, Celsys, CES, Millchem and Payserv — recorded a $15 million loss in the six-month period ending February 29.



Revenues and gross revenues, however, rose to $6,4 million from $4,8 million in the same period a year earlier, while gross profit advanced $3,5 million from 2,1 million a year ago.



Cambria intends to list this year by way of a primary introduction through buying out minority shareholders in Celsys, which is already listed on the Zimbabwe Stock Exchange.
Already, $350 000 has been used in ZSE listing preparation fees.

Labels: LONRHO, LONZIM

posted by MrK @ 3:27 AM