| 27 Aug 2010 |
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Restructuring of Rift Valley Railways International Complete
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Citadel CapitalCitadel Capital
's shareholding in the national railway of Kenya and Uganda reaches the 51% mark as transactions close Citadel CapitalCitadel Capital
(CCAP.CA on the Egyptian Stock Exchange), the leading private equity firm in Africa and the Middle East with US$ 8.3 billion in investments under control, confirmed today that its shareholding in Rift Valley Railways International, the entity that owns 100% of each of the Kenya and Uganda concession companies, has risen to 51% through its subsidiary Ambience Ventures Ltd as it completed the restructuring first announced in March 2010.The development gives Citadel CapitalCitadel Capital management control of RVRI, which has a 21-year concession to operate a century-old rail line with some 2,352 kilometers of track linking the Indian Ocean port of Mombasa in Kenya and through Kenya and Uganda, including the capital city of Kampala.
RVRI's other shareholders include Trans-Century Limited, a Kenya-based investment company (whose shareholding rose to 34% today from 20% pre-transaction), and Bomi Holdings Ltd a Ugandan private investor (holding 15%).
"We look forward to working with our partners to build the reliable, efficient and safe national rail system Kenyans and Ugandans truly deserve," said Karim Sadek, Managing Director at Citadel CapitalCitadel Capital, the leading private equity firm in the Middle East and Africa with US$ 8.3 billion in investments under control in 15 industries spanning 14 countries. "Citadel CapitalCitadel Capital and its partners in RVRI are grateful for the support not just of the governments of Kenya and Uganda, but also of the RVRI lenders, clients, suppliers and above all its dedicated management and staff."
Citadel CapitalCitadel Capital
and the other RVRI shareholders are now finalizing a sustainable business and investment plan that includes a US$ 287 million capital expenditure program to rehabilitee infrastructure and rolling stock. The firm will also work to strengthen RVRI's management team and is in advanced stages of negotiation with a leading global rail consultant to bring in international best practices. Rift Valley Railways International will also continue discussions with the governments of Kenya and Uganda on the revitalization of the concession.
Across its core African footprint, Citadel CapitalCitadel Capital
sees transport costs being a major impediment to economic growth: High costs and systemic inefficiency greatly reduce the competitiveness of African businesses, as East African Community reports clearly underline.Transport prices in East Africa are among the highest in the world, studies find, with transport to Uganda from Kenya presently costing more than US$ 0.13 per ton/kilometer (the standard industry metric) due in large part to heavy reliance on trucking. A lack of operating capacity has resulted in rail capturing less than 10% of East Africa's transport market.
"An efficient rail network could, in time, bring East African transport costs down by as much as 35% due to the operational and fuel efficiency of shipping by rail," added Citadel CapitalCitadel Capital Managing Director Amr El-Barbary. "RVRI today hauls just over 1 million tons per annum out of an existing market of 16 million tons being handled in Mombasa Port. The goal is to see that figure grow to 5 million tons per year by 2015."
-Ends-
Citadel CapitalCitadel Capital (CCAP.CA on the Egyptian Stock Exchange) is the leading private equity firm in the Middle East and Africa. Citadel CapitalCitadel Capital focuses on building regional platforms in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity-Specific Funds. The firm's 19 OSFs now control Platform Companies with investments worth more than US$ 8.3 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, Citadel CapitalCitadel Capital has generated more than US$ 2.5 billion in cash returns to its co-investors and shareholders (on investments of US$ 650 million), more than any other private equity firm in the region. Citadel CapitalCitadel Capital is the largest private equity firm in Africa by PE assets under management (2005-2010, as ranked by Private Equity International). For more information, please visit www.citadelcapital.com.
For more information, please contact:
Ms. Ghada Hammouda
Head of Corporate Communications,
Citadel CapitalCitadel Capital (S.A.E.)
Tel: +20 2 2791-4440
Fax: +20 22 791-4448
Mobile: +20 16 662-0002
Email: ghammouda@citadelcapital.com
© Press Release 2010
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