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
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Lonrho pines after African glory
30/12/2011 00:00:00
by Arash Massoudi
GEOFFREY White spends three weeks of every month jetting across sub-Saharan Africa to check investments ranging from nectarine farms in Zimbabwe to a luxury hotel in the Democratic Republic of Congo.
The chief executive of Lonrho, the Africa-focused conglomerate, White believes that the company’s assets, in what he calls the “the world’s last frontier”, will bear fruit.
White, who used to give business advice to Gulf royal families, joined forces with David Lenigas, Lonrho’s chairman, to resurrect the 102-year-old company that had collapsed from its heights as a FTSE 100 constituent.
“Africa is where Asia was 30 years ago and, in reality, 10 to 15 years in front of people expectations,” Lenigas said, rattling off statistics about the continent’s booming growth.
Lonrho, short for London-Rhodesia, had been built into a multi-continent conglomerate by Roland “Tiny” Rowland, its larger-than-life leader who led the company for more than 30 years beginning in 1963.
But Roland’s empire unravelled in the early 1990s due to declining metal prices and debt.
By 1993 he was ousted as chief executive. Lonrho’s assets were gradually sold and Lonmin, now a FTSE 250 metals company, was spun out. A loss-making hotel in Mozambique was the only asset left on Lonrho’s books by December 2005.
Enter Lenigas, a mining specialist, who became chairman and convinced the board to once again bet on Africa. Along with White, who joined two years later, the duo have revived Lonrho, which they say still has “the strength of a Coca-Cola brand name” in Africa.
Six years on, their gamble is starting to pay off. They have made investments in agribusiness, infrastructure, transportation, hotels and support services in 17 African countries.
Analysts at WH Ireland project that the company’s overall revenues will more than double to $462m in the 15 months to December 31 of next year as the financial year is aligned with the calendar year. Pre-tax profits are estimated to increase by 83 per cent.
“We think a conglomerate is a clever way to diversify risk across Africa,” Lenigas said of the company’s broad portfolio.
Boasting that Lonrho can get fruit from a Zimbabwean farm to central London in three days, White said the company had integrated every step of the process from cold storage to delivery.
Produce accounts for half of the company’s agribusiness, which is 60 per cent of overall revenues. The other half comes from the company’s fish exports, which are sold to big supermarkets in the UK, US and South Africa.
“We don’t think there’s risk in non-cereal farming. If there’s a famine, people won’t come after our green peppers,” said White.
But the shares in the company, which returned to the main market from Aim in April, have dropped 49 per cent on the year to 9.17p, giving the company a market capitalisation of £129m.
“Our main shareholders have been there since 2006 and see this as an investment in the African growth story,” said White.
He adds: “The last five years have been about building the fundamentals, 2012 is about delivering on them.”
The company said that most of the proceeds of a £27m placing in December will be used to buy out minority stakes in its agribusiness.
And Lenigas added that the next time he spoke with shareholders about money, he hoped that it was to tell them about a dividend.
Damian McNeela at Panmure Gordon said that would depend on what the company did with its loss-making airline, Fly540. Many suspect it will be acquired in a reverse takeover by Rubicon Diversified Investments, a cash shell with links to Sir Stelios Haji-Ioannou’s latest airline project, fastjet.com.
“Strategically, the Lonrho story sounds great, but when anyone looks into it, they wonder why aviation,” said McNeela.
While not ruling out the possibility of a reverse takeover, the company’s leaders are characteristically bullish about the possibilities for African aviation.
“There’s screaming demand for north-south and east-west travel in Africa,” said Lenigas.
Labels: LONRHO, LONZIM
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LonZim upbeat over economic recovery
by Gilbert Nyambabvu
11/05/2010 00:00:00
ZIMBABWE-focused investment group, LonZim says it is fairly upbeat about the country’s economic recovery but urges authorities to address existing challenges such as liquidity constraints in order to consolidate the turn-around.
LonZim - whose interests in the country include the Zimbabwe Stock Exchange-listed Celsys Limited, the Leopard Rock Hotel in the eastern highlands as well as a new airline Fly540 - said group turnover had so far increased to $4 million from about $700000 in the comparative period last year.
“Gradually the economy can be seen to be making progress. The business environment has rationalised with dollarisation and the demise of hyperinflation. Companies are once again able to understand their business models, plan for the future and forecast with some accuracy what their objectives and targets are.
“The size of the economy remains very depressed. However, it is growing on a month-by-month basis, encouraged by continuing investment into rebuilding Zimbabwe from the international, public and, increasingly, the private sector,” Chief Executive Geoffrey White said in a statement accompanying the results.
The company said its seven core divisions in the country are now well placed to take advantage of the economic recovery adding significant investment s had also been made in new plant and machinery in the last year as it became clear that the new coalition administration would implement business-friendly policies.
“Where many Zimbabwean businesses are struggling with liquidity and access to capital, LonZim's strategy has always been to pre-fund its portfolio of operations to enable them to be first back to market,” White said.
The company is completing a US$1.7 million refurbishment of its world renowned Leopard Rock hotel and adds that Paynet – an electronic funds transfer system serving the country’s banks – is also in a strong position to grow as the country’s financial services sector recovers.
The group’s regional Fly540 airline is expected to launch its Zimbabwe operations with a limited service “to provide some domestic lift and service the international market requirements from neighbouring country operations.”
“Zimbabwe remains a key target market for Fly540 once international traffic numbers start to build, and the airport at Harare airport is of long term strategic importance as one of the best infrastructure facilities in Southern Africa,” the company said.
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Fly540 Zimbabwe was expected to deliver affordable air links to key domestic and regional cities from a Harare hub with LonZim saying the venture was central to its “investment strategy of identifying current market opportunities in Zimbabwe and establishing companies that will benefit from the economic recovery of the country”.
“We are confident that Zimbabwe has a future. The people of Zimbabwe remain one of the most industrious, valued and skilled work-forces on the Continent, the basic infrastructure across the country is strong and Zimbabwe remains a beautiful destination with significant tourism and agricultural potential.
“The opportunity for the country to once again become a leading African economy remains tantalisingly available,” White said.
Labels: LONRHO, LONZIM, NEOCOLONIALISM
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COMMENT - LonZim is an 'investment fund' created by LonRho (London-Rhodesia), Tiny Rowland's company. Predictably someone is profiting from the low prices in Zimbabwe created by sanctions.
LonZim delivers strong growth as economy recovers
Proactive Investors
Tue, 26 Jan 2010 15:07:00 +0000
LONZIM said it is delivering strong growth as the general Zimbabwe market begins to recover, as it reported a return to profit for the full year ended 31 August 2009.
LonZim reported £2.6 million in turnover, up from 188,000 a year earlier, and a pretax profit of £1.08 million, compared with a £1.09 million loss in the preceding year. Shares were buoyed by the positive results, climbing nearly 9% following the announcement.
Fundamental changes in the Zimbabwe economy in early 2009 brought the end of hyperinflation and slowly helped the country’s employment recover. The changes were largely the result of two key events, the establishment of the inclusive Government in February and the US dollarization of the currency.
Most of its operating businesses have become cash generative and are delivering strong growth in the current year, LonZim said. Net assets rose to £32.6 million at the year-end, following a share buy back of £1.3 million. Cash held at the end of the year was £2.4 million and the company’s net assets per share were 101.6p.
During Zimbabwe’s economic downturn, the company paid its partner’s debts and wages, consequently they retained a skilled workforce and are ready to trade.
Importantly, LonZim's subsidiaries had access to funds and liquidity, at a time when finding liquidity was very challenging in the market.
Through the support and acquisition of distressed businesses, which were forced to operate on a barter system, the company’s subsidiaries have successfully positioned themselves to be 'first back to market'.
During the financial year, LonZim acquired several businesses, which fell in line with its investment criteria.
In October 2008, the company bought 100% of electronic money transfer (ETF) business Paynet Ltd for US$3.19 million. Paynet’s newly built commercial property in Harare which is valued at US$0.95 million, was included in the acquisition.
Paynet provides an EFT platform for 19 of the 21 Zimbabwean banks and more than 1,000 Zimbabwean corporate clients. The Paynet business collapsed under hyperinflation, but LonZim maintained the business's staff, retaining systems in place ready for recovery. In February 2009, the business started to make progress and monthly transactions increased steadily as the economy restarted.
In April 2009, LonZim acquired Zimbabwe's iconic Leopard Rock Hotel for US$8.5 million, the property includes a PGA rated golf course and 400 hectare game farm.
The company said that the hotel has already seen a significant increase in occupancy with growth in bookings and revenues for conferences and meetings as well as from leisure orientated visitors. As the market recovers, the hotel will expand its accommodation and facilities and plans to attract the PGA to hold a tournament at the hotel in due course.
Also during the year, LonZim bought controlling 51% stakes in the ForgetMeNot Africa (FMNA) and Panafmed Ltd. FMNA is a telecommunications software developer, providing a 'message optimiser' application for basic non-3G mobile phones which provide two-way SMS - SMS, instant messaging and email technology platform without the need for sophisticated infrastructure. Panafmed provides a refrigerated distribution logistics for pharmaceuticals and medical product delivery and distribution into and around Zimbabwe.
The company also bought a 6,600 square metres industrial site, including 2,650 square metres of offices and factory space, for US$0.95 million. LonZim acquired the property from the Zimbabwean banking group Kingdom Bank.
LonZim also announced it intends to launch oparations of African low-cost airline Fly540 in Zimbabwe. The company has allocated funds from existing resources for the deployment and establishment of the airline. Operations will be based at Harare airport to serve as a regional freight and passenger operation as and when the market develops.
LonZim said it continues to undertake detailed due diligence on a range of potential acquisitions, where it can identify real opportunities for growth in value in a normalised economic environment.
Labels: COLOUR REVOLUTIONS, LONRHO, LONZIM, NEOCOLONIALISM, NEOLIBERALISM
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(HERALD) LonZim steps up drive to rebuild Zim economy
COMMENT -
" LonZim steps up drive to rebuild Zim economy " how generous of this for profit investment company.
LonZim steps up drive to rebuild Zim economy
By Walter Muchinguri
LONDON Stock Exchange-listed investment firm, LonZim has raised £1,17 million after issuing new ordinary shares, which will be used to help recapitalise its subsidiaries.
LonZim, which has several operations in Zimbabwe and others in Mozambique, also reaffirmed its commitment to the rebuilding of Zimbabwe.
"The signs of economic growth in Zimbabwe are now tangible," LonZim executive chairman Mr David Lenigas said.
The LonZim board announced that it raised £1 170 269 through issuing 4 255 525 new ordinary shares of 0.01 pence each in the share capital of the company at 27.5 pence per placing share.
The placing shares, the board said were unconditionally placed save for their admission to trading on AIM.
The placing shares will together represent approximately 12 percent of the company’s enlarged issued share capital and the total number of shares in issue following completion of the placing will be 36 331 525.
The funds raised by the company will help to ensure that LonZim subsidiary companies have access to working capital to continue to run their businesses in a commercial and professional manner as economic growth returns to the important market sectors where LonZim operates.
The company has interests in Zimbabwe Stock Exchange-listed company Celsys and Paynet that owns and operates an Electronic Funds Transfer system that automates the process of companies transmitting bulk payment instructions to their corresponding financial institutions.
Other local operations include Gardoserve (Pvt) Limited that is trading as Millpal Chemicals that has been supplying chemicals to industries in Zimbabwe for over 20 years. It also owns the luxurious Leopard Rock Hotel in Vumba near Mutare.
It also plans to operate a low cost airline Fly40 Zimbabwe and has also established Medisure, a company that will import, wholesale and distribute pharmaceutical products in Zimbabwe.
In addition, LonZim is currently reviewing a number of potential investment opportunities including the acquisition and development of several portfolios in the country.
Labels: LONRHO, LONZIM
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Lonrho to funnel US$100m more into Zim investments
Business Reporter
LONRHO Plc plans to inject a further US$100 million for investments on the back of anticipated economic recovery following the formation of an inclusive Government, executive director Mr Geoffrey White has said.
The company’s website shows that, "the investment betting on a recovery in Zimbabwe’s economy, will announce ‘big’ acquisitions."
"We’ll be announcing a couple of really big deals in the next two to three weeks," he said.
Lonrho Plc chairman Mr David Lenigas, said LonZim, will still be "fine" should the economy fail to turn around in the next five years.
The conglomerate has 20 percent stake in LonZim.
While LonZim’s existing investments are "commercially sound, basically none of them are making money, Adopting South Africa’s currency, the rand, would "bring an element of stability" for businesses in the country", he added. "Zimbabwe should adopt the currency to stabilise the economy"
LonZim is an investment company created by London-listed Lonrho Plc to acquire a portfolio of commercial property projects and investments in assets and companies in Zimbabwe that have significant opportunity for future growth.
The company has so far acquired a 60 percent stake in a payroll company that works with 16 banks Paynet, Celsys, and Millpal, an industrial chemical supplier.
Lonrho, through its subsidiary, LonZim, has started exploring avenues for investments in the country with between six to eight deals expected to be sealed soon.
Mr Lenigas said within the next two to three years, LonZim would be the largest conglomerate in Zimbabwe.
Lonrho also operates East Africa’s biggest private airline and plans to start operating its Fly540 airline in Angola in the next few weeks.
Labels: LONRHO, LONZIM, NEOCOLONIALISM, SANCTIONS
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