Lonmin disposes Petrozim stake

HARARE - South Africa-registered platinum group metals (PGMs) producer Lonmin Plc (Lonmin) is disposing its 50 percent stake in Zimbabwe’s Petrozim Line (Private) Limited (Petrozim) for $14,8 million.

Lonmin — listed on both the London and Johannesburg stock exchanges — announced the deal last Friday, saying it was part of strategies to focus on core business.

“Lonmin...has...entered into a conditional sale of shares agreement to sell its 50 percent interest in Petrozim for a gross cash consideration of USD14 750 000 to the National Oil Infrastructure Company of Zimbabwe (Private) Limited,” the mining group said.

“The transaction forms part of Lonmin’s on-going programme to dispose of non-core assets,” it explained, adding that “the purchase price and special dividends will be paid in cash on completion of the transaction and will be used to improve the company’s liquidity”.

In addition, “Lonmin will receive USD8 million in the form of special dividends from Petrozim”.

Petrozim — incorporated in Zimbabwe — owns and operates the 208km Feruka to Harare fuel pipeline.

It currently holds the sole and exclusive right to transport all petroleum products imported into Zimbabwe through the pipeline.

Lonmin said its interest in Petrozim has been impaired to nil and no attributable profits were recorded in the company’s report and accounts for the year ended September 30, 2017.

However, closing of the transaction — expected to be by 2018’s fourth quarter — is subject to various conditions,
including approvals from the Zimbabwean Competition and Tariff Commission and tax collector Zimbabwe Revenue Authority.

Consent of Lonmin’s lending banks is also crucial for completion of the deal, which Standard Bank of South Africa has acted as financial adviser.

Lonmin is one of the world’s largest PGMs producers. PGMs are essential for many industrial applications, especially catalytic converters for internal combustion engine emissions, as well as their widespread use in jewellery.

Lonmin’s operations are situated in the Bushveld Igneous Complex in South Africa, where more than 70 percent of known global PGM resources are found.

The company mines, refines and markets PGMs.

On the other hand, Petrozim owns and operates the Feruka-Msasa pipeline and is responsible for the bulk transportation of liquid and gaseous fuels into the country.

It plays a pivotal role in Zimbabwe’s fuel supply chain.

Petrozim has the capacity to deliver six million litres of fuel per day from Feruka to Msasa, Harare.

The company delivers around 80 percent of the petrol and diesel requirements for the country.

It controls the pump station at Feruka, the pipeline and ancillary assets from Feruka to Msasa, the pump station at Wilton near Marondera as well as the tank farm at Msasa.

A few years back, Penspen — a leading global provider of engineering and project management services to the energy industry — was awarded a contract by Petrozim to provide engineering, procurement services, construction and commissioning supervision for capacity expansion of the Feruka-Harare multi-product pipeline.

After successfully completing a study on the project, Penspen was to provide its services at three separate sites — Feruka, Wilton and Harare.

Comments (1)

LONRHO one of the most corrupt companies Africa will ever see - read up about it and you will be shocked comrades

ace mukadota - 3 July 2018

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