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Rift Valley Railways Investments Turns a Corner Ahead of Major Loan Signing

Rift Valley Railways Investments (RVRI) of Kenya-Uganda has reported US$ 674,000 in EBITDA for the month of June 2011.
Qalaa Holdings | 22.07.2011
Rift Valley Railways Investments (RVRI) of Kenya-Uganda has reported US$ 674,000 in EBITDA for the month of June 2011. This marks the first time RVRI has recorded a positive EBITDA since Citadel Capital, the leading private equity firm in the Middle East and Africa with US$ 8.7 billion in investments under control in 15 industries spanning 14 countries, purchased an indirect stake in the company in December 2009. Following a shareholder restructuring in mid-2010, the Firm currently owns a 51% stake in RVRI via its Platform Company in the Africa railways sector Africa Railways.

RVRI has a 25-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 to the interiors of Kenya and Uganda, including the capital city of Kampala.

“We are very pleased with the significant progress that RVRI management has achieved, both operationally and in terms of the company’s bottom line,” said Karim Sadek, Managing Director at Citadel Capital. “Throughout 2010, Citadel Capital and RVRI worked closely to implement a sustainable business plan and investment plan that includes a USD 287 million, five-year capital expenditure program to rehabilitate RVRI’s infrastructure and rolling stock. Over the last two quarters, we have witnessed significant improvements in the overall efficiency of the company’s operations, improvements which are beginning to have a positive impact on the company’s financial results, despite the fact that the financing package for this plan has not yet been finalized.”

Africa Railway’s announcement follows on the heels of African Development Bank’s (AfDB) decision last week to approve the issuance of a US$ 40 million loan, as part of a bigger debt package that is expected to be signed in the very near future. The debt package, along with the additional equity to be injected by the shareholders of RVRI, will go to support the rehabilitation of the Rift Valley Railways, which has been declared a top development priority for both Uganda and Kenya.