Category Archives: Rift Valley Railways
Tiomin Kwale saga
Thanks MM – the Canadian $ is almost on par as the US $
Looking at the accounts of Tiomin and 2008 AGM notes paints an interesting picture of the company for foreign investment deals at a time when Rift Valley Railways is deal is unraveling and Econet continues its four year incubation as the mobile phone market passes them by at a growth rate of almost 20% a year
Tiomin, which claims to have invested $86 million directly and indirectly since 1995, secured financing in 2006 but the project was unable to take off and funding was canceled in 2007 on a venture in which the company was to invest $150 million and pay the Kenya government 2.5% gross annual revenue.
The Company had a target to conclude (divest part or all of) Kwale and slashed costs from $450,000 to $70,000 per month (most staff were given notice in March 2008) until divestment which happened in July when the Jinchuan takeover was announced – with the Chinese firm purchasing 70% of the venture for just $25 million.
What can Jinchuan do going forward to improve on where Tiomin got stuck?
- Get some local shareholders (they are now shepherding RVR back on track)
- Have a clear communications strategy with locals; go beyond issuing vague press releases.
- Spread the wealth; do more value addition processes here, work with local banks/financiers to raise funds locally, engage in some CSR, and join the Kenya association of manufacturers (KAM)
- Work better with stakeholders; in this case, it is local landowners (farmers), the taxman, and employees.
- And don’t blame the ‘government’ on tax matters. The Tiomin AGM notes state that ‘Jinchuan were key’, and were able to ‘facilitate government relations’ which mean the project could resume soon.
Coop Bank IPO is Next
NSE is overweight with financial shares, and may get heavier with the listing of Co-operative Bank later this year. The listing is expected to raise 10 billion shillings ($150 million) for growth and expansion. The shareholders transferred the assets and liabilities of the bank to a limited liability company (from a co-operative socirty) last week. – and their class B shares (par value Kshs. 100 shillings will be split into shares of par value Kshs. 1)
However as a long suffering customer of the bank, I may not add to might already overweight basket of financial stocks.
edit – Co-Op IPO opens October 20 2008
elsewhere
transport
– Kenya Airways; are offering a novel business trip package – 4 trips for $1,000 to be completed by March 2009 for trips to Dubai, Bangkok, honk Kong, Guangzhou
– Delta airlines open a Nairobi office
Railway destiny in local hands
– The Government wants Rift Valley Railways to increase capacity, lay more tracks, and transfer cargo ASAP. ICDCI looks at RVR as a long term investment, but they hope to get return on the investment within 4 years. They own 10% of the company and will acquire another 10% from IFC over the next four years.
Communications
– Zain will increase share capital by 75% (raising $4.5 billion) from its Kuwaiti shareholders for expansion in Africa. They are already advertising to put up base stations and adding dealers in Kenya
– good to know Econet has the most subscribers in Zimbabwe.. That’s an ARPU in millions?
Dividend cycles
how long goes it take some NSE companies to pay declared dividends?
One month: Standard chartered (interim), Kenol (interim)
Two months: Barclays, BAT, Olympia
Three months Crown Paints, TPSEA (Serena), Jubilee, Nation Media, Total, HFCK, Diamond Trust, Pan Africa, NIC, Standard Chartered (final), Bamburi (interim)
Four months: Centum (ICDCI), Standard Newspapers, Access Kenya, Eveready, Bamburi (final)
Five months: Kenya Re, Kenya airways, Express, Rea Vipingo
Spotlight on foreign investors
after Morgan Stanley & Safaricom
Rift Valley Railways: This week as the patience of the governments of Kenya and Uganda reached new highs, local stakeholders finally got rid of the managing director. More stories are now coming out on the (lack of) financial strength of the backers of the railway. The East African newspaper has (consistently) had the best coverage of the railway management over the last two years.
About a year ago, the former MD gave a talk on the difficulties he faced in reviving the railway and the way forward for the 25 year program.
Tiomin is another ‘foreign investor’ who never had financing that was sufficient enough for them to launch their operations in Kwale, even after the government and the courts gave them go ahead
Zain is the new brand of the former Celtel Group that is expanding all over Africa. But according to their group financial results for the half year, Kenya is the only African country where they did not gain subscribers over the last year. At June ’08, Kenya had 1.9 million subscribers compared to 2.4 million in June 2007. Compare that to Uganda 1.8m (up 100%) and Tanzania 2.8m (up 48%). Half year revenue and loss was $79.4 million and $26.4m compared to %100m and a loss of $4.2 million at the same point in 2007 Safaricom is blamed for defending their market turf
Google have bought into Mobile Planet a leading local provider of value added mobile services (and also a Safaricom partner).
Safaricom 7s
Safaricom IPO Day 24: Commentary – Strong market rebound. Someone is buying everything up below 7.00. We have based out. Deals 3,070 Turnover 305.67 million [$4.63 m] Average 6.94 High 7.00 Low 6.80 Last7.00 Volume 44 million shares Commentary and data from Rich.co.ke – NSE data vendor [with Free real time prices between 0930 -1500]
End of day : 64.65 million Shares, closing at 6.95 (up 2.2%)
Celtel Kenya gets a new CEO (7th?) [Rene Meza from Paraguay] as Celtel wins an award for best telecoms operator in Africa at the 2008 Business in Africa Awards held in London.
Rift Valley Railways gets two new shareholders [Prime Fuels and Mirambo Holdings]. Meanwhile both Kenya and Uganda governments are getting impatient and workers went on strike [they have now just got their June salaries]
The Vision 2030 Delivery Secretariat is seeking – director general, directors [social & political pillars, enablers & macro, economic pillar, and Strategy, marketing, empowerment and communication] chief officer [monitoring and evaluation] officer [project finance] project accountant, executive secretary. apply to psplanning@planning.go.ke by 31/7