South Africa's Thelo to raise $250m for Africa’s giant rail corridors
TLDR
- Thelo Group pursuing acquisition of Deutsche Bahn AG’s 49% shareholding for $250 million to enhance rail and port development in sub-Saharan Africa.
- Chairman Ronnie Ntuli plans aggressive capacity expansion and project preparation with new capital injection.
- Company exploring potential stock exchange listing and engaging African and international financiers for investment opportunities.
Thelo Group’s management plans to buy Deutsche Bahn AG’s 49% shareholding and is currently in talks with financiers to raise $250 million to transform the South African company into a developer of rail lines and ports in sub-Saharan Africa.
The capital will be used “to expand our capacity quite aggressively,” fund “project preparation on some of the projects that we’ve already secured,” and inject equity into these projects, said Thelo’s Chairman Ronnie Ntuli in an interview with Bloomberg.
Ntuli added that the company may seek to list on a stock exchange and talks are ongoing with African infrastructure financiers, including development finance institutions, as well as international investors for debt and equity investment.
Key Takeaways
The scale of Africa’s transport and logistics challenges is evident, and the establishment of the AfCFTA is expected to increase intra-Africa trade by 81% by 2035, highlighting the crucial role of various transport modes, including rail, ports, and rolling stock. As a result of the AfCFTA, the transport sector is anticipated to expand by nearly 50%. The AfDB estimates that road, air, rail, and port infrastructure will require annual investments of $35 to $47 billion. Most of Africa’s freight consists of bulk commodities from the agricultural and minerals sectors, including strategic minerals for export. However, the continent’s current rail transport network is dilapidated, leading to significant stranded freight. National operators cannot move freight efficiently, resulting in an over-reliance on trucks and the road network, which transport 80% of goods. Thelo Group's rail transport and infrastructure development projects aim to address these issues, offering a more efficient and cost-effective solution that will significantly reduce the reliance on trucks and improve the overall transportation of goods.
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