Nairobi: Egypt's Citadel Capital has a conditional go-ahead to acquire all of South African company Sheltam Close's 35 per cent stake in an east African railway concession, a director said on Monday.
Citadel has already acquired a 17.5 per cent stake in Rift Valley Railways (RVR), which won a 25-year concession to run the Kenyan and Ugandan railways jointly, after buying a 49 per cent stake in Sheltam, the operator's lead investor.
The two have now agreed on Citadel taking 51 per cent of Sheltam to give it Sheltam's full 35 per cent stake in RVR, once the deal has the green light from lenders to RVR including the International Finance Corporation (IFC), said Karim Sadek, a managing director at Citadel Capital.
"It is done, we are not going to renegotiate, [it is] signed, sealed, finished. The only reason we are not there yet is that we are waiting for that consent," he said.
Another shareholder in RVR, TransCentury, has complained about the deal and says it will seek legal redress.
Other partners in the consortium are Mirambo Holdings and Primefuels Limited, Centum Investment and Babcock & Brown of Australia.
"We are always looking for an additional stake, even now. If any of the shareholders want to drop out we are more than happy to cover them."
The shareholders in RVR completed a $10 million (Dh36.7 million) cash call at the end of January, Sadek said. A second $10 million will be raised this month.
The money raised in January will mostly go towards paying overdue concession fees but the second tranche of cash will partly be used to invest in track renovation work and new engines, he said.
The $20 million is part of the $50 million the company needs to raise in a restructuring process to get trains moving.
Kenya demanded last year that the concession deal be renegotiated to change the shareholding and leadership structure in order to inject fresh capital into the line's operations.
