HomeBusiness DigestLonZim Takes to the Skies

LonZim Takes to the Skies

LONZIM PLC says it will commence operations for a Fly540 airline in Zimbabwe to service domestic and regional markets. The company said its flights are scheduled to start from September.

The London Stock Exchange (LSE) junior announced that FLY540 is being rolled out across Africa with local partners in each country to service the domestic and regional African markets. The company did not name its local partner in Zimbabwe in the venture.

Fly540 is a Lonrho PLC-owned airline on lease to LonZim.

Fly540 is set to offer Air Zimbabwe competition for market share in a move that could see other airlines setting up shop in the country.

Pioneer Airlines (PA), a planned airline project by transport and logistics group Pioneer Africa Corporation, suffered a still birth after government did not grant the group an operating licence a few years ago. Mid Airlines also failed to take off in Zimbabwe in 2003.

Until recently, government had been very protective of the aviation sector and happy to see Air Zimbabwe have a larger share of the market unfettered.

Meanwhile LonZim stands accused by AMB Ireland, a 22,12% shareholder in the company of gross corporate governance shortfalls because of its business reliance on Lonrho.

Miffed by apparent corporate governance concerns and poor investments at LonZim, AMB called for an Extraordinary General Meeting (EGM) to remove the Alternative Investments Market listed company’s four directors off the board but the requisition to convene an EGM has been ignored.

Should LonZim convene the meeting, AMB Ireland will seek to remove four directors from the board and reconstitute the board to pave way for the sale of the company’s “non profitable and start-up” investments.

In April, AMB Ireland sought an EGM through the registered owner of its LonZim shares, Pershing International Nominees Limited but LonZim is seemingly ignoring the demands.

LonZim said then that the “EGM would most likely be held in June” but no date has been set yet.

“AMB Ireland does not believe it is right and proper for the board to ignore a duly served shareholder requisition in this way,” the company said.

Damille Partners IV, a 6,46% shareholder in LonZim, has also thrown its support behind AMB Ireland and will support all its resolutions.

AMB capital alleges there is a blatant conflict of interest on the part of LonZim directors.

The financial services firm says of the £18,96 million capital that LonZim deployed in investments, £9,78 million, approximately 51,6% of the total capital, has been invested in related party transactions or transactions involving Lonrho and or its employees, “either immediately or in the future.”

The company cited Lonzim’s acquisition of Lonrho shares in a private placement without shareholder approval as another case in point.

The AIM company also acquired Blueberry International Services Limited from Lonrho and the lease by LonZim to Fly 540 Uganda, a Lonrho subsidiary, of the two aircraft purchased by LonZim in October 2008.

LonZim also bought a 79% shareholding in Aldeamento Turistico de Macuti, SARL (ATdM), the holder of a Beira property on which a hotel will be developed, which will be “operated and managed by an entity owned by Lonrho plc” as announced on 20 February 2008.


Recent Posts

Stories you will enjoy

Recommended reading