Lonrho on comeback trail, mulls HK listing

PUBLISHED : Thursday, 15 July, 2010, 12:00am
UPDATED : Thursday, 15 July, 2010, 12:00am

Lonrho, the 101-year-old Anglo-African conglomerate formerly spearheaded by controversial tycoon Tiny Rowland, is gearing up for a Hong Kong initial public offering.

The old 'London and Rhodesian' dominated African trade between the 1960s and early 1990s but shrivelled to a cash shell after embarking on a major asset sell-off shortly before Rowland's death in 1998.

Australian entrepreneur David Lenigas became Lonrho's chairman in 2006, when it owned nothing of Rowland's former massive empire except a hotel in Mozambique, and has since snapped up a new portfolio of companies in Africa.

Lonrho chief executive Geoffrey White (pictured) said the company, now valued at GBP115 million (HK$1.35 billion) on London's junior AIM exchange, would list on the main London market and another major international bourse as part of its bid to regain its former glory.

'We want to move to the London Stock Exchange and are reviewing options for at least one other market. Though the plans are early stage, we are looking closely at Hong Kong,' White said.

Since Lenigas joined, Lonrho has bought stakes in an African food processing firm, a port, hotels, a builder, a water company and an IT services firm, as well as aircraft.

That is a far cry from the early 1990s, when the conglomerate employed millions across Africa in gold mines, game reserves, car dealerships, oil pipelines and agriculture. It also owned international hotel chains and a stake in London's Observer newspaper.

But White said the conglomerate could become a large pan-African player again. 'The brand name in Africa is still huge,' he said.

In Britain, Lonrho also remains well known for a series of controversies involving Rowland.

In 1973, former British prime minister Edward Heath lambasted Lonrho as the 'unacceptable face of capitalism', accusing it of busting trade sanctions against what was then Rhodesia.

In the late 1980s, Rowland lost a battle with Egyptian businessman Mohamed Al Fayed for control of Harrods. He responded by publishing a book about Fayed called A Hero from Zero.

Rowland was chased out of his conglomerate in 1994 when he was in his mid-70s, in a boardroom coup that was led by German property developer Dieter Bock.

This was two years after Rowland outraged some in Britain by selling a stake in Lonrho's Metropole Hotels to the Libyan government and calling Colonel Quaddafi 'my friend'.

Like most international companies responding to Hong Kong Exchanges and Clearing chairman Ronald Arculli's campaign to attract foreign listing candidates to the territory, the new Lonrho is focused on making friends in China.

White said he will visit Beijing and Hong Kong next month to talk to potential investors, adding Lonrho also wants mainland business partners.

Trade between China and Africa soared to a record US$106.6 billion in 2008, according to Chatham House.

'We are interested in services, infrastructure, transport and agriculture as these sectors support the growth of Africa,' White said. 'Masses of Chinese companies have the same interests.'

But investors have not exactly gobbled up stock in non-Chinese firms which sold shares here so far.

Shares in Rusal, Russia's biggest aluminium company, have plunged 26 per cent to HK$7.27 since the firm's Hong Kong trading debut in January. Mongolian miner South Gobi Resources closed at HK$94 yesterday, 25 per cent below its January listing price.