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RVR sale boosts TransCentury’s war chest to Sh44 billion

BUSINESS
By James Anyanzwa | May 30th 2014

Transcentury Group Ltd has announced an ambitious plan to invest a whopping $500 million (Sh43.5 billion) in infrastructure projects over the next three years.

The move is part of the Nairobi Securities Exchange (NSE) listed company’s efforts to shore up its revenue reserves following a botched investment in the Rift Valley Railways (RVR).

Chairman Zephaniah Mbugua said the mega projects would be implemented in collaboration with key technical partners.

He said the high return projects, which would be implemented between 2014 and 2016, are focused on power, engineering and other infrastructure projects.

He singled out the planned development of a 35MW Geothermal Plant in Menengai, as the start of its investment plan.

Mbugua said the new investments would be funded through the company’s internally generated funds, including proceeds from the sale of its stake in RVR.

“We look forward to strengthening the group’s performance by focusing on the key divisions outlined and building strategic relationships with long term partners to build infrastructure projects across the region, drive regional competitiveness and create value for shareholders” he said.

He was speaking during the Company’s 16th Annual General Meeting (AGM) in Nairobi yesterday.

He said TransCentury would add value by originating, building and operating infrastructure projects along with technical partners.

TransCentury exited its investment in RVR in March 2014 realising $43.7 million from the sale of its 34 per cent stake in Kenya-Uganda Railways Holding Limited.  

Through its wholly owned subsidiary Safari Rail Company Ltd, it disposed off its entire shareholding in RVR to Citadel Capital of Egypt on March 31, this year.

The decision was made owing to the delayed turnaround of RVR, which meant that this investment failed to meet return targets set by TransCentury.

The RVR consortium was established to manage the railways of Kenya and Uganda railways. However, he reckoned that the sale proceeds from the exit from RVR were below the historical fair value of the investment.

Consequently the company issued a cautionary statement warning its shareholders that its profits for this year (2014) ending December 31 would be 25 per cent lower than that of 2013.

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