Citadel Capital has led existing shareholders in a new $82million financing round of its transport portfolio company Rift Valley Railways (RVR).
Citadel owns 51% of RVR while Trans-Century holds a 34% stake, with the remainder held by Bomi Holdings. The funds will finance the improvement of RVR’s operations as part of a rehabilitation project launched in November 2010.The equity financing package backs RVR’s $286million capital expenditure plan, which includes a $164 million debt injection from a consortium of Development Financial Investors (DFI’s).
As part of the debt deal, the African Development Bank has agreed to provide $40million, Kreditanstalt für Wiederaufbau Entwicklungsbank (KfW) will commit $32million while the International Finance Corporation will inject in $22million. The Netherlands Development Finance Company (FMO), Kenya’s Equity Bank and the Infrastructure Crisis Facility Debt Pool have each committed $20 million. The Belgian Investment Company for Developing Countries (BIO) will provide $10 million.
“Citadel Capital has a proven track record not just of structuring compelling investment opportunities in very interesting sectors of the African economy, but also of sourcing financing from highly sophisticated global partners,” said Ahmed Heikal, Citadel’s chairman.
Created in 2005, Rift Valley Railways Consortium (RVR) manages Kenya and Uganda’s the government-owned railway systems. Headquartered in Kampala, RVR has a 25-year concession to operate a 2,000 kilometers rail line across the two countries. The company reported an EBITDA of $0.7 million in June 2011, the first month it has recorded a positive operational cash flow since Citadel first backed the company in 2010.
Article by Hamza Ali , Reporter, Private Equity Africa