Sources such as the Financial Times and Jeune Afrique report that among others, Goerge Soros's Quantum Fund is trying to control Lonrho, one of Africa's largest conglomerate. Given the tense situation, particularly around Congo's "geological scandal" and the huge mining interests surrounding it, readers who want to know more can read the folowing:
Lonrho Plc
Overview
Organisation
Nature of Business
Results
Shareholders
General Information
Directors/Managers
Contact Information
Overview
Lonrho Plc, headquartered in London, is an international group which is listed on both the London Stock
Exchange and the Johannesburg Stock Exchange. The company was founded in 1909.
Organisation
In 1996 Lonrho has sold its shares in the Metropole Hotels group, while banknote printer Harrison & Sons was
sold to De La Rue.
In 1997, Lonrho sold its sugar interests to Illovo Sugar, which has listed on the Swazi Stock Exchange in the
place of Lonrho Sugar.
Lonrho is currently in the process of restructuring its activities, with all its mining assets being placed in a new
company which is to be listed.
Lonrho Africa restructured from a geographical to a divisional basis. The 13 territorial regions have been
converted into five divisions: motors, agribusiness, distribution, hotels and property and construction.
The Zimbabwe Government is negotiating to buy a 50% stake in Lonrho's Zimbabwe mining operations as part
of its indiginisation drive.
The South African mining company Benicon has bought the 80% of the capital of gold exploration company
Aluvioes de Manica, which is active in Manica province of Mozambique, from the Lonrho group.
Northern Breweries Plc in Zambia, which was sold to Lonrho Limited in February 1996, has been acquired by
the Madhvani Group with interests in brewing, sugar, coffee and tea estates in East Africa.
Nature of Business
Lonrho Plc is one of the leading companies in Africa, with assets in many African countries and a stake in
many of the key industries.
The main activities of the Lonrho group are:
mining and oil and gas production in Africa and the USA
ownership and management of property, hotels and casinos (most now sold or in the process of being
sold)
agriculture, including ranching and tea production
motor vehicle assembly and distribution
aircraft distribution
construction
manufacturing
general trade
Lonrho South Africa, one of the largest corporate groups in South Africa, is a diversified company with
substantial investments in mining and refining, aviation, construction, manufacturing and motor holdings.
Mining and Oil and Gas Production
The mining division of Lonrho Plc accounts for more than 50% of profits and includes:
Ashanti Goldfields, Ghana's largest gold mining company, which is key in Ghana's mining industry
gold mines in Zimbabwe, held through Corsyn Consolidated Gold Mines (Anzac, Arcturus, Mazowe,
Muriel) and Independence Gold Mining (Athens, How, Redwing, Shamva), which together produce 30%
of the gold output of Zimbabwe's mining industry
platinum mines in South Africa, which are co-owned by Impala Platinum and Lonrho South Africa, and
which produce palladium and rhodium as well as platinum.
Discussions with Gencor regarding a rationalisation of the platinum interests of the two groups are
underway. Gencor's plans to rationalise its platinum assets with those of Lonrho have been thwarted
by a ruling of the European Commission. The reason given for this is the fear that this would reduce
competition in the world platinum market.
The commission has also indicated that it would take a similar view of any steps by Anglo
American to increase its platinum interests by taking a controlling stake in Lonrho.
In South Africa Impala Platinum operates a number of platinum mines on land owned by the
Bafokeng community. The community has applied to the courts to set aside the 1990 land contracts
signed between the platinum group and a trustee of the Bafokeng. The agreement entitled the
Bafokeng to 14.0% of Impala's taxable income from lease royalties. In terms of the 1997 mining
leases extended by the 1990 agreements, ownership of all plant, equipment and materials required
to maintain the mine passes to the Bafokeng community once Impala loses the right to mine, and no
compensation is payable to Impala. Confidential discussions are continuing with both parties
resorting to the press from time to time to air points of view.
Duiker Exploration Ltd, a South African company which owns four bituminous and two anthracite
collieries and a gold mine
Tweefontien Collieries comprising Waterpan, Boschmans, Witcons
Mpumulanga Collieries comprising Strathrae, Tselentis, Spitzkop
Kwazulu-Natal Division comprising Klipwal gold mine, Heritage Colliery and Nyembe Colliery
the South African assets of Agipcoal, acquired in 1995, which include extensive coal reserves, two coal
mines and an export entitlement through the Richards Bay Coal Terminal
a joint venture agreement with Gencor to develop gold mines in the CIS
Lonrho and Anglo American have withdrawn from a joint gold project in Uzbekistan as the project's capital
and operation costs were higher than expected and would result in lower than expected returns.
Lonrho has upstream and downstream oil interests in Mozambique, owning a share in the oil products pipeline
from Beira in Mozambique to Mutare in Zimbabwe. Profits from the Beira to Mutare pipeline company CPMZ
were GBP 5 million in 1994. The pipeline is operating at full capacity.
Lonropet, a unit of Lonrho mining division, has oil and gas exploration and production rights to a 30,000 km2
block of the Rovuma basin in Mozambique northern province of Cabo Delgado. Lonropet is going
considerably deeper than the 2,000 m exploration wells dug in the 1960s in this region. The company is
seeking a major partner in the oil and gas industry in Mozambique.
Property, Hotels and Casinos
The Lonrho Hotel group has interests in 26 hotels and lodges.
African Hotels manages the African portfolio which consists of:
Kenya (serving the tourist market)
Mount Kenya Safari Club
Norfolk Hotel
Mara Safari Club
Sweetwaters
five other lodges
Ghana
Labadi Beach Hotel (serving the business community)
Mozambique
Hotel Cardoso (newly renovated, serving the business community)
Agriculture
Lonrho is the largest commercial food producer in Africa where its farming and ranching activities take place
on one million acres of land in eleven countries.
The principal products are citrus, cotton, coffee, maize, sugar (which contributes about 75% of divisional
profits), tea, timber and wheat. The company also rears cattle, ostriches and pigs.
Lonrho agricultural companies include:
EATEC
Farmers Choice
Mufindi Tea Company
Charter Estates (Zimbabwe)
Nyanga Timbers (Zimbabwe)
The Wattle Company (Zimbabwe)
Willoughbys Consolidated (Zimbabwe)
Kalangwa Estates (Zambia)
Lomaco (Mozambique)
Makadi Estates (Malawi)
Mumbwa Cotton Ginnery (Zambia)
Motor Vehicle Assembly and Distribution
Lonrho is one of the largest motor distributors in Africa with agencies for Massey Ferguson, Mercedes Benz,
Nissan, Peugeot, Rover, Toyota, Yamaha and others.
The Delta, Reeds and Isuzu retail motor subsidiaries market Isuzu and Opel products in the Western Cape
province of South Africa.
Aircraft distribution
Lonrho South Africa subsidiary National Airways Corporation is the sole distributor of Bell helicopters and
represents Raytheon Aircraft Company, manufacturers of Beechcraft and Hawker aircraft, in South Africa.
Construction
Matrix Projects (Pty) Ltd undertakes turnkey project engineering, specialising in commercial and industrial
buildings.
Manufacturing
Through Tullis Laundry and Engineering Supplies (Pty) Ltd the group dominates the South African industry
laundry and dry-cleaning machinery market.
Results
1996 results show profits before exceptional items increasing by 13% to 170 million pounds. Operating profit
of the mining division fell 13 million pounds to 90 million pounds. Duiker's profit increased from 22 million
pounds to 32 million pounds, due to improved bituminous coal prices and increased exports. Lonrho Platinum
profits declined by 10 million pounds to 34 million pounds. Higher working and exploration costs reduced
Ashanti's profit contribution by 10 million pounds to 22 million pounds. Lonrho Sugar provided operating
profit of 39 million pounds in spite of the 23 per cent depreciation in the rand.
Lonrho Africa operating profit rose 18% to 52 million pounds on turnover of 508 million pounds (1995: 468
million pounds).
The Metropole sale removed its contribution (down 3 million pounds to 21 million pounds) from reported hotel
operating profits. Profits of the Princess hotel chain were unchanged at 21 million pounds.
Shareholders
A 1996 European Commission ruling blocked a proposed merger between Gencor's Impala Platinum and
Lonrho's South African platinum operations. Anglo American subsequently acquired a 25.8% interest in
Lonrho by purchasing the shareholding of Dieter Bock. However Anglo American has since agreed with the
European Commission to reduce its 25.8% share of Lonrho to below 10% by mid 1999 to comply with
European Union requirements in respect of the two groups' platinum interests. If the court overturns the
European Commission ban on an Impala-Lonrho Platinum merger, it would remove the platinum operation
from Lonrho and clear the way for Anglo American to retain its 25.8% stake in the group.
In July 1997 JCI bought a 27% stake in Lonrho from Anglo American, De Beers and Southern Life for R2.5
billion. In terms of the agreement, JCI has six months to raise the R2.5 billion necessary to complete the deal,
structured on a call and put option basis, exercisable in December 1997. If successful, JCI will then be the
largest shareholder in Lonrho.
General Information
Organisation Type:
Company
Registered in:
United Kingdom
Registration No.:
69/00015/10
Listing(s):
Exchange
Market Name
Johannesburg Stock Exchange (JSE)
lonrho
[LON]
Business Sector(s):
Financial Services
Holding Companies
Directors/Managers
Chief Executive Officer:
Mr NJ Morrell (Nicholas)
Chairperson (Non-Exec.):
Sir J Craven (John)
