Kenya-Uganda railway threatened by lack of capital
13 January 2010
The shareholders of Rift Valley Railways (RVR) have been issued an ultimatum and given a two-week deadline by the Kenya and Uganda governments to commute their interests to the Kenya-Uganda Railway Holdings.
For the past 18 months, RVR shareholders' arrangement had its partners only able to inject funds in proportion to lead investor Sheltam Rail Company's equity stake in the concessionaire, Business Daily reported - which was not enough.
More was needed to buy rolling stock, pay government feeds and encourage employee productivity.
Dr Cyrus Njiru, co-chair of the Joint Railway Commission, explained the new arrangement would allow shareholders to not only inject more money but bring in international lenders willing to contribute the $50 million (£30.7 million) each needed for the turnaround.
Reuters recently announced the two countries were looking for a total of $250 million of fresh capital to put into the railway project - and private equity firm Trans-Century was the first to offer as of last Friday (January 8th).