Lonrho Agriculture acquires 51% of Oceanfresh
June 07 2010 - 7:42AM
UK Regulatory
TIDMLONR
RNS Number : 1768N
Lonrho PLC
07 June 2010
7 June 2010
Lonrho Plc
("Lonrho" or the "Company")
Lonrho Agriculture acquires 51% of Oceanfresh Seafood (Pty) Ltd to expand the
company operations into new markets including the USA
Lonrho Plc (AIM : LONR) is delighted to announce that Lonrho's agriculture
division ("Lonrho Agriculture") has purchased 51% of Oceanfresh Seafoods
(Propriety) Ltd, ('Oceanfresh') a leading vertically integrated producer and
supplier of premium, sustainable seafood from Africa. The acquisition is aimed
at expanding the operations of Lonrho Agriculture into new markets including the
USA.
Established in 2000, Oceanfresh is the market leader in the supply of deep sea
crustacean (lobsters and prawns) from Mozambique and a major supplier of premium
finfish from South Africa and Mozambique. Oceanfresh operates a sustainable
fishing model, fishing in regions that are well below agreed 35% sustainable
fishing volumes.
The Oceanfresh operations consist of harvesting premium finfish and shellfish
off the coasts of Mozambique and South Africa. Sourcing product mainly via third
party contracted vessels the catch is processed at the Oceanfresh processing
plant in Maputo, Mozambique. The processed fresh and frozen produce is marketed
and distributed to existing customers in Europe and South Africa. The company
has recently successfully completed a trial program to commence exports to the
USA retail market with leading US retailer Costco. The support now available
from Lonrho will provide the necessary resources to develop exciting new market
opportunities
The existing management team will remain as significant shareholders in
Oceanfresh and continue to run the day to day operations. Lonrho will take board
control.
It is believed that significant operational and cost benefits to the Oceanfresh
business will accrue through access to the agri-processing, handling and
logistics network available within Lonrho Agriculture. Access to a competitive
corporate funding structure, removal of expensive factoring agreements and
access to working capital will improve margins and commercial opportunities.
The consideration paid by Lonrho for the 51% is a cash payment of R 3.8m (GBP
336,860) for the equity, to be reinvested in the business, and Lonrho will
arrange an initial working capital injection of R 7.7m (GBP 682,642) to grow the
business.
Loan facilities from former shareholders within Oceanfresh totalling R 9.5m (GBP
841,550) will be subordinated and interest free, repayable with no fixed term
based on a percentage of net profit achievement. Incentives and penalties
relating to net profit achievements have been included into the agreement with
the remaining minority shareholders together with commitments to further working
capital based on growth targets.
Oceanfresh reported turnover for the past twelve months of R 78m (GBP 6,900,000)
with an EBITDA of R 3.5m. (GBP 309.694)
David Lenigas, Lonrho Executive Chairman commented:
Lonrho is already active in the fish sector in South Africa and Namibia and sees
this as a market with strong growth potential in both Southern Africa and
internationally. The acquisition of 51% of Oceanfresh brings further skilled,
sector specific, human resources and important access to product to Lonrho. The
synergies between the existing Lonrho businesses and Oceanfresh should lead to
increased margins and will provide Oceanfresh with access to realistically
priced working capital enabling it to develop the business. The opportunities
are already in place to expand the business, and to provide access to the USA
marketplace for Lonrho's fish lines and other Lonrho Agriculture products. .
LONRHO ENQUIRIES
+---------------------------------------+---------------------+
| Lonrho Plc | +44 (0)20 7016 5105 |
+---------------------------------------+---------------------+
| David Lenigas, Executive Chairman | +44 (0)7881 825 378 |
+---------------------------------------+---------------------+
| Geoffrey White, Chief Executive | +44 (0)7717 307 308 |
| Officer | |
+---------------------------------------+---------------------+
| David Armstrong, Finance Director | +44 (0)7833 054 693 |
+---------------------------------------+---------------------+
| | |
+---------------------------------------+---------------------+
| Pelham Bell Pottinger PR | |
+---------------------------------------+---------------------+
| Charles Vivian | +44 (0) 20 7861 |
| | 3126 |
+---------------------------------------+---------------------+
| | +44 (0) 7977 297903 |
+---------------------------------------+---------------------+
| James MacFarlane | +44 (0) 20 7861 |
| | 3864 |
| | +44 (0) 7841 672 |
| | 831 |
+---------------------------------------+---------------------+
| | |
| Beaumont Cornish Limited(Nomad) | |
+---------------------------------------+---------------------+
| Rosalind Hill Abrahams | +44 (0) 20 7628 |
| | 3396 |
+---------------------------------------+---------------------+
| Roland Cornish | +44 (0) 20 7628 |
| | 3396 |
+---------------------------------------+---------------------+
| | |
+---------------------------------------+---------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
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