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

Citadel Capital Platform Company Africa Railways announces that its subsidiary RVRI has achieved a positive EBITDA for the first time in its recent history; African Development Bank (AfDB) has approved a US$ 40 million loan to finance RVRI.

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.

Transport prices in East Africa are among the highest in the world. An efficient regional rail network could, in time, bring transport costs down by as much as 35%. The RVRI loan is consistent with the African Development Bank’s lending strategy, which aims to support Africa’s economic infrastructure and increase private sector financing in low-income countries.

“We welcome AfDB’s decision to assist in the financing of this promising turnaround story,” said Ahmed Heikal, Chairman and Founder of Citadel Capital. “The rehabilitation of the rail network in East Africa is vital to long-term economic growth prospects in the region. This loan will advance the upgrading of vital railway infrastructure, expedite the transition from roads to rail in terms of regional goods transportation and allow RVRI to improve on its passenger rail offerings.”


Citadel Capital (CCAP.CA on the Egyptian Stock Exchange) is the leading private equity firm in the Middle East and Africa. Citadel 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$ 8.6 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, Citadel Capital has generated more than US$ 2.2 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 Capital is the largest private equity firm in Africa by PE assets under management (2006-2011, 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 Capital (S.A.E.)

g...@qalaaholdings.com (click to reveal this email)
Tel: +20 2 2791-4439
Fax: +20 22 791-4448
Mobile: +20 16 662-0002