INVESTMENTS firm, Centum, has opted to offload its shares in Rift Valley Railways (RVR), paving way for fresh restructuring of the company managing the Kenya-Uganda railway.
The company, in a Monday statement, announced that it was selling off its $6m (about sh12b) stake in RVR for $4.5m (about sh9b); $1.5m (about sh3b) less than its initial investment at the company that is edging towards revamping operations at the East Africaâ€™s century-old rail system. Centum was, however, categorical that the 10% stake would only be transferred to interested existing shareholders.
The existing shareholders include Sheltam (35%), TransCentury (20%), Tanzaniaâ€™s Mirambo Holdings (10%), Prime Fuels of Kenya (15%) and Babcock Investments Holdings of Australia (10%).
This indicates that the deal would lock out Citadel Capital since a new ownership agreement that recognises the Egyptian firm has not yet been signed. The sell-out comes hardly a week after Citadel Capital and TransCentury issued a joint statement announcing a proposed restructuring, which will see the Egyptian equity firm control majority shares (51%), TransCentury (34%) and Ugandan investor, Charles Mbire (15%), by the end of April.
However, analysts last week indicated that Centumâ€™s move to shade-off its shares accrued from a loss after the company invested the $6m in the docile RVR. The over 70% decline in profit, experts insisted, also resulted from a shortfall related to a reduction in business at the Nairobi Stock Exchange and its sh7.6b write down on its investment in RVR.
â€œWe are confident in our portfolio to deliver market meeting returns to our shareholders, and continue to demonstrate capacity to generate superior returns through economic cycles and periods of market volatility,â€ Centum said in a statement.
Centum to offload its $6m stake in Rift Valley Railways