No tiny amount for Lonrho

[] — NEW look investment company Lonrho Africa – once the domain of the legendary Tiny Rowland – might be virtually ignored by South African investors. But the group is receiving some strong backing from offshore punters.

The group – listed on London’s vibrant AIM market and the JSE’s contrasting moribund venture capital market – announced earlier this month that it had raised around £13m (about R160m) in a placement of new shares with unnamed institutions and investors.

The placement was pitched at 28p (360c/share) and represented a chunky 23% of the company’s enlarged share capital. You might have thought that with such a large issue surely the identity of the investors should have been disclosed. However, the placement does give Lonhro a sizeable war chest to make new investments across the continent.

Shaping up to be an interesting investment vehicle

Lonrho Africa’s attempt to re-establish a significant presence in Africa revolves around making new investments in natural resources, infrastructure, leisure and agribusiness sectors.

It’s early days yet, but Lonrho is shaping up to be quite an interesting investment vehicle. Perhaps more South African investors would pay attention to the stock if its South African listing were shifted off the VCM to the AltX or one of the JSE’s mining boards?