Kenyan firm and Citadel in RVR deal

March 23, 2010
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, NAIROBI, Kenya, Mar 23 – A Kenyan investment company Trans-Century Limited and Ambience Ventures, a subsidiary of Citadel Capital from Egypt will now be the two major shareholders at Rift Valley Railways (RVR).

This follows the restructuring of the Kenya-Uganda Railway concession deeds which upon official confirmation will see Ambience Ventures and Trans-Century increase their stake to 51 and 34 percent respectively.

In a joint statement, Trans-Century Limited and Ambience Ventures seemed to confirm the deal which will see the remaining share go to a Ugandan investor whose name will be made public mid next month when the review of the new concession agreement is sealed.

“Trans-Century Limited, the fastest growing African Investment Company based in Kenya focused on making high growth investments across Sub-Saharan Africa and Ambience Ventures Ltd have agreed to a joint solution for the restructuring of Rift Valley Railways,” the statement said.

RVR has been dogged by boardroom wrangles since 2008 prompting legislators and members of the public to call for the cancellation of the 25-year concession contract awarded to South African Sheltam Railways Company by the Ugandan and Kenyan governments.

The row, which has seen other financiers hold back funding into RVR has in the recent past become worse with the announcement that Citadel Capital had bought out a 49 percent stake in Sheltam, which until recently was the lead shareholder in the concessionaire.

This dispute degenerate as Trans-Century which also wanted a piece of Sheltam’s shares vowed to block the move prompting the lead financier, the International Finance Corporation to arbitrate.

A meeting that brought together representatives from the three parties held in London last week seems to have resolved the deadlock with the two protagonists agreeing to work together to ensure the smooth running of RVR.

The new shareholders have pledged to work together to secure the much needed capital, develop a $250 million business and investment plan and also strengthen RVR’s management structure.

“Both companies appreciate the importance of Kenya’s and Uganda’s national railway and are committed to executing a successful turn-around of Rift Valley Railways,” the statement read.

The two companies also say they will work with both the Kenyan and Ugandan governments to facilitate the development of the standard gauge.

With the negotiated agreement, it is believed that finances will begin to flow to allow for the revamping of the dilapidated railway networks into efficient, modern and reliable transport systems.

The new deal will for the first time see a Ugandan investor own a stake in the concessionaire.

The arrangement will also see Prime Fuels of Kenya which holds 15 percent, Mirambo Holdings, Babcock Investments Holdings of Australia and Centum Kenya Ltd which each has a 10 percent share relinquish their stake.

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