Corporate News
TransCentury faces off with Citadel in battle for RVR
An RVR train. The row between Cidatel and TransCentury is threatening the turnaround of RVR, which since being granted the concession three years ago has failed to live up to the expectations of the Kenya and Uganda governments. Photo/FILE
Posted Friday, March 19 2010 at 00:00
But most importantly the fund owners are keen on a firm hold of the region’s logistic corridor to support their planned investments in the region from Uganda to Southern Sudan and Kenya.
The local PE firm with the support of Helios Capital is keen to offer $50 million (Sh3.7 billion) of investment capital to RVR but on condition that it assumes the lead shareholder role, while Citadel has promised to inject $180 million to turn around.
Stagnant revenues
Consultancy firm Deloitte, which handles the firm’s financial records, notes that nothing short of a swift turn around of the firms operations, investment in the rail infrastructure and capital injection by the shareholders will rescue it from collapse.
The battle for control of the rail firm comes as its performance continues to deteriorate on reduced customer numbers.
In 2009, RVR closed the year with a loss of $17.5 million on revenues of $56.1 million, driven by stagnant revenues on reduced customer numbers.
Businesses are frustrated that while rail transport is cheaper than road, most cargo is being hauled on road denying them the edge in a regional market that is becoming increasingly competitive.
But with a revamp of RVR coupled with expected surge in traffic the troubled rail firm could reverse its fortunes.
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