(Adds deal value, background)
NAIROBI, April 1 Kenya's TransCentury
said on Tuesday that it has sold its 34 percent stake in Rift
Valley Railways (RVR) to Egyptian private equity firm Citadel
Citadel said it bought the shares for $37.8 million, raising
its stake to 85 percent. Uganda's Bomi Holdings owns the rest.
RVR, operator of the sole rail line linking Kenya's Indian
Ocean coast with Uganda, is set to face competition from a new
railway in the coming years after the Kenyan government broke
ground on building a standard-gauge line from the port city of
Mombasa to the Ugandan border in November last year.
Rail transport in the east African nation accounts for only
1 million tonnes of the 20 million tonnes of cargo that passes
through the port of Mombasa to the region every year.
Citadel, which first bought a stake in RVR in 2010, said it
had improved the colonial-era rail line but businesses and
passengers say train speeds remain far too slow, hurt by decades
of neglect, theft and underinvestment by successive governments.
($1 = 86.3000 Kenyan Shillings)
(Reporting by Drazen Jorgic in Nairobi and Shadia Nasralla in
Cairo; Editing by Duncan Miriri and David Goodman)