Lonrho: Agriculture Unit Buys 51% Of Oceanfresh For ZAR3.8 Million

Lonrho Plc (LONR.LN), a pan-African company with a portfolio of investments in agribusiness, infrastructure, hotels, transportation and support services, announced Monday that is agriculture division has purchased 51% of Oceanfresh Seafoods (Propriety) Ltd for cash payment of ZAR3.8 million.

MAIN FACTS:

-Oceanfresh Seafoods (Propriety) Ltd, are a 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 U.S..

-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 ZAR3.8 million (GBP336,860) for the equity, to be reinvested in the business, and Lonrho will arrange an initial working capital injection of ZAR7.7 million (GBP682,642) to grow the business.

-Loan facilities from former shareholders within Oceanfresh totaling ZAR9.5 million (GBP841,550) 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.

-Shares at 1149 GMT down 0.25 pence, or 2.13%, at 11.50 pence.

-By Zechariah Hemans, Dow Jones Newswires; 44-20-7842-9411; zechariah.hemans@dowjones.com

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