RVR owner seeks Sh20 billion

Majority owner of Rift Valley Railways, Qalaa Holdings, plans to raise Sh20 billion ($222.4 million) through a rights issue to increase its interests in its subsidiaries in East Africa.
The board of Qalaa, formerly Citadel Capital, is seeking shareholders’ approval for the cash call to help it gain greater control of its arms, in a bid to fast-track a turnaround strategy.

Qalaa’s transformation process started in the last quarter of 2013 and saw the company convert its business model from a private equity to investment firm, with an increase in ownership to majority stake of its core interest areas.

BENEFIT FROM UPTURN

The Egyptian firm acquired a 34 per cent stake in RVR, formerly held by Kenyan investment company TransCentury.

“With Egypt now on track for an economic recovery, the time is right to complete our transformation through the acquisition of additional stakes in the subsidiaries and business units that are best positioned to benefit from the upturn,” said Mr Ahmed Heikal, chairman and founder of Qalaa Holdings in a statement Monday.

Last year, Qalaa shareholders conducted another cash call, raising Sh45 billion ($500 million), part of which went into buying out TransCentury’s stake in the railway company. The move increased its shareholding in the concessionaire to 85 per cent from 51 per cent.

Uganda’s Bomi Holdings still holds a 15 per cent stake in RVR, but analysts say the firm could be bought out, giving the firm 100 per cent control of the concession. Qalaa has interests in transport, energy and manufacturing sectors.