Lonrho considers flotation of interests in Africa

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The Independent Online
LONRHO, the international trading conglomerate, is considering the flotation of a large part of its interests in Africa, the group's operating heartland.

The move was seen as the continuation of its campaign to persuade investors to recognise its true value, which has already seen it call off its legal battle over House of Fraser with the Fayed brothers, appoint outside directors to its board and float its Ashanti gold- mining business in Ghana.

Lonrho has appointed a sub- committee of directors to 'evaluate plans to strengthen the company's trading activities in Africa'. One priority will be to consider floating a minority of shares in a new operating company, formed by combining all its African businesses except sugar and mining.

The committee will comprise Robert Whitten, Nicholas Morrell and Philip Tarsh, all experienced African directors.

Platinum mining and sugar are two of the group's most valuable African businesses. It also has interests in motors, equipment distribution, paint, newspapers, hotels and tea plantations, and operates in many countries, including Mozambique, Zimbabwe, Zambia, Botswana and South Africa.

Lonrho would not comment on the size of the businesses to be sold, but it is likely they will account for about pounds 500m of the group's pounds 800m African turnover. African profits last year were pounds 69m of a total of pounds 172m, although much of that will have come from mining and sugar.

The float is seen as a way of putting a value on a large portion of the group's business - as the Ashanti float did - as well as raising funds for expansion from outside investors. Lonrho would not sell any of its shares and would retain a majority holding.

The float, which is likely to be in London, would also cash in on growing investor interest in Africa.

Analysts said the float was another sign that Dieter Bock, the German businessman who owns 18.8 per cent of the group and is chief executive, is determined to change the group's secretive image. A flotation may persuade investors that they are not dependent on the contacts of Roland 'Tiny' Rowland, the group's founder.

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