Trade Arabia reported that Egypt's Citadel Capital has a conditional go ahead to acquire entire South African company Sheltam Close's 35% stake in an east African railway concession.

Citadel has already acquired 17.5% stake in Rift Valley Railways which won 25 year concession to run the Kenyan and Ugandan railways jointly after buying 49% stake in Sheltam.

Mr Karim Sadek MD at Citadel Capital said that the 2 have now agreed on Citadel taking 51% of Sheltam to give it Sheltam's full 35% stake in RVR, once the deal has the green light from lenders to RVR including the International Finance Corporation. It is done, we are not going to renegotiate, signed, sealed and finished. The only reason we are not there yet is that we are waiting for that consent.

Mr Sadek said that 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 USD 10 million cash call at the end of January. A second USD 10 million will be raised by the end of March.

He said that 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. The USD 20 million is part of the USD 50 million the company needs to raise in a restructuring process to get trains moving.

Meanwhile, Mr Sadek said that most of the shareholders had agreed on a new structure whereby RVR is the lead investor in a yet to be formed Kenya Uganda Railway Holdings that will own the concession. Once the restructuring deal is signed the shareholders will be required to raise USD 50 million within 15 months. They would have USD 20 million of it by the end March.

(Sourced from Reuters)