Disposal of Lonrho Aviation Division to Rubicon [MSC]

Lonrho Plc to list its aviation division on the London Stock Exchange (AIM) to create "FastJet", an African low cost airline, in conjunction with Sir Stelios Haji-Ioannou and easyGroup

Lonrho Plc is pleased to announce that it has agreed to dispose of its aviation business, Lonrho Aviation, to Rubicon Diversified Investments Plc, an AIM listed investment company ("Rubicon", LN: AIM : RUBI) (the "Transaction"). The total consideration for the Transaction payable to Lonrho is US$85.7m, consisting of 1,150,537,455 Rubicon ordinary shares calculated at a notional value of 4.8 pence per Rubicon ordinary share. Lonrho currently holds 9,500,000 ordinary shares in Rubicon and, as a result of the Transaction, the Company's enlarged shareholding in Rubicon on completion of the Transaction ("Completion") will be 1,160,037,455 ordinary shares, comprising 73.7% of Rubicon's enlarged issued share capital. The General Meeting of Rubicon's shareholders, for the purpose of approving the Transaction, has been convened for the 29th June 2012.

As part of the Transaction, Sir Stelios Haji-Ioannou's easyGroup Holdings Limited ("easyGroup") will own 5% of the ordinary share capital of Rubicon, as enlarged by the Transaction. Following Completion Rubicon will pursue a strategy of developing a low cost African airline utilising the Lonrho Aviation route network and existing platforms. Under a licensing agreement with easyGroup, the airline will be branded FastJet and will use modern jet aircraft and operate to European standards.

The background to the Transaction is the completion earlier this year of Lonrho's four year programme of developing operational hubs in East, West and South West Africa for Lonrho Aviation. Lonrho Aviation's strategic hubs operate in Kenya, Tanzania, Ghana and Angola, providing an unparalleled route network and operating platform to launch across Africa.

In addition to the partnership with easyGroup, a key benefit of the Transaction to Lonrho is the substantial cash resources held by Rubicon (£8.8m as at 31 December 2011) which will be available for continued investment in the airline business following Completion. Fastjet will focus on developing a true low cost airline for Africa based on the existing Lonrho Aviation platform which, in its existing operations as Fly540, had turnover of US$57 million and carried 525,375 passengers in the 15 months to 31^st December 2011. Passenger loads continue to increase with Fly540 carrying 53,225 for the month of May 2012.

The population in Africa has now reached one billion people and the strengthening emerging economies across the Continent are building a significant demand for regional aviation services. Seven of the World's top ten fastest growing economies are now in Africa. GDP and consumer spending is rising and the rapidly increasing numbers of intercontinental flights that are flying into Africa create an increasing demand for regional African travel.

As part of the agreement between easyGroup and Rubicon, easyGroup will have the right to appoint two directors to the Rubicon Board. It is intended that one of the easyGroup appointments will be Mr Ed Winter who would become CEO following Completion. Ed Winter launched and was the CEO of the low cost carrier GO for British Airways and thereafter became the COO of easyJet. Sir Stelios Haji-Ioannou has the right to be personally appointed to the Rubicon Board as the other easyGroup board representative following Completion. David Lenigas and Geoffrey White will remain on the board of Rubicon.

As at 31 December 2011, Lonrho Aviation, operating as Fly540, had Total Assets of US$ 83.5 million and in the 15 months to December 2011 made a loss after tax of US$ 19.0 million. The majority of these losses were predominantly due to the start-up and establishment costs of opening the Angola and Ghana operational hubs.

The Rubicon shares received by Lonrho as consideration for the disposal will be subject to a 12 month lock in period, during which time Lonrho cannot sell or transfer such shares. Whilst Lonrho owns more than 50% of Rubicon's ordinary shares, both Rubicon and the aviation business will be consolidated in Lonrho's accounts.

The Takeover Panel has agreed, subject to the passing of the required resolutions at the Rubicon General Meeting on 29th June 2012, to waive the obligations on Lonrho and its concert party members, under Rule 9 of the Takeover Code, to make a general offer for the entire share capital of Rubicon.

David Lenigas, Executive Chairman of Lonrho commented:

"Lonrho has completed its investment programme into its aviation division and has successfully created a unique aviation network in Africa. The next step in the growth of the business requires a World class aviation team to develop the business to meet the growing demand for a scheduled regional airline in Africa. I am delighted that Sir Stelios Haji-Ioannou and easyGroup have studied this market and concluded that the Lonrho aviation division provides a unique entry platform for the development of a true low cost carrier for Africa, to be branded FastJet.

The combination of Lonrho's experience in Africa; the aviation experience of Sir Stelios Haji-Ioannou and easyGroup; the route network and operations already established by Lonrho Aviation across Africa and Rubicon's cash resources will enable Fastjet to quickly develop its low cost airline."