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LONRHO AFRICA - ABRDIGED LISTING PARTICULARS

Release Date: 06/05/1998 17:13
Code(s): LON
Wrap Text

(INCORPORATED ON 31 MARCH 1993 IN ENGLAND AND WALES UNDER THE COMPANIES ACT 1985 - NO. 2805337 AND RE-REGISTERED AS A PUBLIC COMPANY ON 26 FEBRUARY 1998) ("LONRHO AFRICA" OR "THE COMPANY") ABRDIGED LISTING PARTICULARS
THE ABRIDGED LISTING PARTICULARS SET OUT BELOW DO NOT CONSTITUTE AN OFFER OR INVITATION TO THE PUBLIC OR TO ANY PERSON TO SUBSCRIBE FOR OR PURCHASE SHARES OR ANY OTHER SECURITIES IN THE COMPANY. NO SUCH SHARES OR SECURITIES HAVE BEEN MARKETED OR ARE BEING MADE AVAILABLE IN WHOLE OR IN PART TO THE PUBLIC IN CONJUNCTION WITH THE COMPANY`S APPLICATIONS FOR LISTING IN LONDON AND
JOHANNESBURG. THE INFORMATION IS PROVIDED IN TERMS OF THE LISTINGS REQUIREMENTS OF THE JOHANNESBURG STOCK EXCHANGE ("JSE") WITH REGARDS TO ABRIDGED LISTING PARTICULARS AND HAS BEEN EXTRACTED FROM THE DETAILED LISTING PARTICULARS OF LONRHO AFRICA, DATED 4 MARCH 1998, AS UPDATED BY SUPPLEMENTARY LISTING PARTICULARS OF LONRHO AFRICA, DATED 17 MARCH AND 29 APRIL 1998, AND SHOULD BE READ IN CONJUNCTION WITH THE FULL TEXT OF SUCH DOCUMENTS, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AS SET OUT BELOW. 1. INTRODUCTION
FOLLOWING THE UK HIGH COURT`S APPROVAL OF THE DEMERGER BY LONRHO PLC ("LONRHO") OF ITS AFRICAN NON-MINING BUSINESSES ("THE DEMERGER"), AND SUBJECT TO THE REGISTRATION BY THE UK REGISTRAR OF COMPANIES, THE LISTING OF ALL OF THE ORDINARY SHARES OF 20 PENCE EACH IN LONRHO AFRICA ISSUED AND TO BE ISSUED PURSUANT TO THE DEMERGER (EXPECTED TO COMPRISE 157 572 088 ORDINARY SHARES OF 20 PENCE EACH) COMMENCES ON THE JSE AND THE LONDON STOCK EXCHANGE SIMULTANEOUSLY ON 7 MAY 1998. 2. NATURE OF BUSINESS
LONRHO AFRICA AND ITS SUBSIDIARIES AND ASSOCIATED COMPANIES ("THE GROUP") CURRENTLY OPERATES IN 14 SUB-SAHARAN AFRICAN COUNTRIES (INCLUDING MAURITIUS) AND HAS FIVE CORE ACTIVITES: MOTORS:
THE MOTORS DIVISION HOLDS A WIDE RANGE OF DISTRIBUTORSHIPS AND DEALERSHIPS IN TEN AFRICAN COUNTRIES, IMPORTING, DISTRIBUTING, SELLING AND SERVICING MOTOR VEHICLES, MOTOR CYCLES, GENERATOR SETS AND SMALL AIRCRAFT. THE DIRECTORS BELIEVE THAT THE GROUP IS A NEW VEHICLE MARKET LEADER IN THE MAJORITY OF THE COUNTRIES IN WHICH IT OPERATES. THEY ALSO BELIEVE THAT TOYOTA, THE GROUP`S FLAGSHIP FRANCHISE, IS THE LARGEST SELLING MOTOR VEHICLE BRAND IN SUB-SAHARAN AFRICA. AGRI-BUSINESS:
OPERATING IN SEVEN AFRICAN COUNTRIES, THE AGRI-BUSINESS DIVISION CARRIES OUT PRINCIPALLY THE DOWNSTREAM PROCESSING OF PRIMARY AGRICULTURAL PRODUCTS, WITH INCREASING FOCUS ON PRODUCTS FOR EXPORT. THE PRINCIPAL ACTIVITIES OF THE DIVISION ARE COTTON GINNING IN AFRICA, COTTON MERCHANTING IN THE UK, TIMBER PROCESSING, FOOD PROCESSING AND THE BREWING OF OPAQUE BEER. DISTRIBUTION:
THE PRINCIPAL ACTIVITY OF THE DISTRIBUTION DIVISION IS THE PURCHASE OF GOODS FROM INTERNATIONAL AND LOCAL SUPPLIERS FOR SALE THROUGH THE GROUP`S EXTENSIVE DISTRIBUTION NETWORK IN NIGERIA. THE DIVISION ALSO ARRANGES TRADE FINANCE FOR THE GROUP FROM ITS UK OFFICE. HOTELS:
THE GROUP OPERATES ELEVEN HOTELS AND LODGES AT THE HIGHER END OF THEIR RESPECTIVE MARKETS IN KENYA, GHANA, MOZAMBIQUE, MAURITIUS AND ZIMBABWE. THE HOTELS IN MAURITIUS AND ZIMBABWE ARE OPERATED UNDER MANAGEMENT CONTRACTS. THE GROUP ALSO OWNS A HOTEL IN ZAMBIA WHICH IT INTENDS TO SELL. PROPERTY AND CONSTRUCTION:
THE PROPERTY AND CONSTRUCTION DIVISION IS RESPONSIBLE FOR THE DEVELOPMENT AND MANAGEMENT OF THE GROUP`S PROPERTY INTERESTS THROUGHOUT AFRICA. IN ADDITION, THE DIVISION CONSTRUCTS, DEVELOPS AND MANAGES THIRD PARTY PROPERTY.
THE DIRECTORS OF LONRHO AFRICA BELIEVE THAT THE KEY STRENGTHS OF THE GROUP ARE: MANAGEMENT EXPERIENCE IN AFRICA:
THE MAJORITY OF THE GROUP`S SENIOR AND MIDDLE MANAGEMENT HAVE WORKED IN AFRICA FOR MANY YEARS AND THE RECENT REORGANISATION PROVIDED THE GROUP WITH AN OPPORTUNITY TO STRENGTHEN FURTHER BOTH ITS SENIOR AND MIDDLE MANAGEMENT TEAMS. THE DIRECTORS BELIEVE THAT THIS MANAGEMENT EXPERTISE IS KEY TO OPERATING SUCCESSFULLY IN AFRICA AND ENHANCES THE ABILITY OF THE GROUP TO EXPAND ITS RANGE OF BUSINESSES WITHIN THE AFRICAN COUNTRIES IN WHICH IT OPERATES WHEN APPROPRIATE OPPORTUNITIES ARISE. STRONG LOCAL RELATIONSHIPS:
THE GROUP, SUPPORTED BY ITS NETWORK OF COUNTRY CHAIRMEN, HAS MAINTAINED LONRHO`S STRONG, LONG-STANDING RELATIONSHIPS WITH GOVERNMENTS, LOCAL COMMUNITIES AND BUSINESSES. GEOGRAPHICAL DIVERSIFICATION:
THE WIDE RANGE OF COUNTRIES IN WHICH THE GROUP OPERATES REDUCES ITS EXPOSURE TO ANY SINGLE POLITICAL, ECONOMIC OR CLIMATIC EVENT IN THE REGION. PARTICIPATION IN ECONOMIC DEVELOPMENT:
THE CORE BUSINESS ACTIVITIES SELECTED BY THE GROUP ARE IN A NUMBER OF MARKET SECTORS WHICH THE DIRECTORS BELIEVE ARE IMPORTANT TO, AND WILL BENEFIT FROM, ECONOMIC GROWTH IN THE COUNTRIES IN WHICH THEY OPERATE. MARKET LEADERSHIP:
BASED ON THE DIRECTORS` ESTIMATES OF THE MARKETS IN WHICH THE GROUP OPERATES, THE MAJORITY OF LONRHO AFRICA`S BUSINESSES ARE LEADERS IN THEIR MARKETS. STRONG BRANDS:
THE GROUP`S BUSINESSES OWN A NUMBER OF STRONG BRANDS INCLUDING FARMER`S CHOICE, JOHN HOLT AND THE LONRHO AFRICA NAME ITSELF. ASSET BACKING AND CAPITAL STRUCTURE:
THE GROUP OWNS OR LEASES LAND AND BUILDINGS WHICH, AS AT 30 SEPTEMBER 1997, HAD A NET BOOK VALUE OF GBP140 MILLION AND HAD PRO FORMA NET ASSETS (INCLUDING MINORITY INTERESTS) OF GBP270 MILLION AS AT THAT DATE. THIS PROVIDES THE GROUP WITH SUBSTANTIAL ASSET BACKING. IN ADDITION, AS PART OF THE TERMS OF THE DEMERGER, THE GROUP HAS RECEIVED A CAPITAL INJECTION FROM LONRHO RESULTING IN PRO FORMA GEARING AT 30 SEPTEMBER 1997 OF 22 PER CENT. 3. PROSPECTS
THE GROUP`S PERFORMANCE IS SIGNIFICANTLY AFFECTED BY THE ECONOMIC, CLIMATIC AND POLITICAL CONDITIONS IN THE COUNTRIES IN WHICH IT OPERATES. DESPITE THE HISTORICAL VOLATILITY OF SUCH CONDITIONS IN THESE COUNTRIES, THE DIRECTORS BELIEVE THAT THE CORE BUSINESS ACTIVITIES OF THE GROUP ARE IN A NUMBER OF MARKET SECTORS WHICH ARE IMPORTANT TO, AND WILL BENEFIT FROM, ECONOMIC GROWTH IN THOSE COUNTRIES IN WHICH THEY OPERATE. 4. DIRECTORS BERNARD HARRY ASHER - NON-EXECUTIVE CHAIRMAN
ANTONY CHRISTOPHER LEOD PARVIN - EXECUTIVE DEPUTY CHAIRMAN MARK VIVIAN ADRIAN NEWMAN - CHIEF EXECUTIVE KEITH MELVYN ATKINSON - FINANCE DIRECTOR STEPHEN RODERICK WALLS - NON-EXECUTIVE DIRECTOR MICHAEL STUART WILSON - NON-EXECUTIVE DIRECTOR
ALL OF YORK HOUSE, MERCURY COURT, TITHEBARN STREET, LIVERPOOL L2 2RG. 5. DETAILED LISTING PARTICULARS
COPIES OF THE DETAILED LISTING PARTICULARS AND SUPPLEMENTARY LISTING
PARTICULARS OF LONRHO AFRICA, AS MENTIONED ABOVE, WILL BE AVAILABLE, IN ENGLISH, FROM TODAY, 7 MAY 1998 TO 28 MAY 1998 DURING NORMAL BUSINESS HOURS AT THE SOUTH AFRICAN OFFICES OF LONRHO, SIXTH FLOOR, 19 GIRTON ROAD, PARKTOWN 2193, JOHANNESBURG. DATED: 6 MAY 1998 SPONSORING BROKER HSBC SIMPSON MCKIE

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