TransCentury faces off with Citadel in battle for RVR

“Citadel Capital is keen to build cohesion with all RVR shareholders and looks forward to the IFC’s consent,” he added.

TransCentury, on its part, preferred to keep its cards close to its chest only saying through Mr Ngugi Kiuna that it has its expectations and demands.

While the meeting is important for the wrangling share holders, IFC also seeks to salvage the concession as it seeks to recover up to $10 million (Sh750 million) already disbursed to RVR.

The IFC also said it would reconsider its help to the firm if the shareholders fail to reach an agreement and “put their house in order.”

“IFC will not be disbursing any further loans to RVR until shareholders present a viable plan to turn the business around,” said a statement from IFC’s Communications representative in Kenya, Houtan Bassiri.

IFC, which is supposed to disburse $22 million (Sh1.6 billion), appears to hold the view that Citadel is in RVR to stay and other shareholders must find a way to accommodate the Egyptian firm. Some $64 million is already available in a facility that has not been drawn on.

IFC and Germany’s state banking group KfW made the loan available at the start of the concession but required some $50 million of equity from RVR.

The IFC was the government’s lead adviser on the concessioning of the Kenya-Uganda Railways and has been trying to play neutral after the two governments appeared to take sides in breaking the impasse with Kenya’s Treasury and Transport ministry officials siding with the highly influential TransCentury Group, while their Ugandan counterparts opted for the Egyptian wealthy investment club.

The London meeting comes as it emerges that the battle for control of the firm is tilting to the advantage of Cidatel Capital after the Egyptian firm announced it is gunning for a larger stake in RVR and that it’s is keen to make an offer to other shareholders.

“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,” said Mr Sadek in an earlier interview.

TransCentury is worried that Cidatel might force it to sell its 20 per cent holding.

“The Egyptians want to buy all of Sheltam and inject the money and stop the other share holders from participating,” said Mr Ngugi Kiuna, who is TransCentury’s representative on RVR’s board.

“All others have agreed to sell. TCL was approached but we will not sell. We are in this for the long haul,” he added.

The other shareholders of the company are local listed investment firm Centum Ltd with a 10 per cent holding, Tanzania’s Mirambo Holdings (15 per cent), Prime Fuels of Kenya (15 per cent) and Babcock Investments Holdings of Australia (10 per cent).

The battle between the PEs is informed by forecast outsized returns from the railway in an East African market that is expected to rev up the movement of bulk cargo across the region.