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Bulgarian Government seeks extension from BDZ’s creditors

Tue, Nov 03 2009 15:03 CET byDnevnik.bg 717 Views
Bulgarian Government seeks extension from BDZ’s creditors

Photo: Nadezhda Chipeva

Bulgaria’s Transport Ministry will meet on November 3 with the creditors of state railway carrier BDZ to ask for a grace period until the end of 2010, Deputy Transport Minister Kamen Kichev told Dnevnik.

The debt-ridden company has run up a debt of 140 million leva. Transport Minister Aleksander Tsvetkov said in October that BDZ and National Railway Infrastructure Company (NRIC) were practically bankrupt.

The ministry will appeal for the longest possible grace period to implement a restructuring programme aimed to make the company viable again, Kichev said. More than 2000 employees would be made redundant as part of the restructuring.

The carrier’s biggest creditors are five banks, which provided two bond loans under the previous two governments. The first, for 30 million euro, was taken in 2004 to renovate 3620 carriages. Two years later, the company took a further 120 million euro to repair 1200 carriages and cover debt owed to state-run power grid operator NEK.

A further 67 million euro was spent on the purchase of 25 diesel engines.

Asked about the Cabinet's available options in case creditors rejected the proposal, Kichev said: "We’ll have to convince them as this is the only way to get BDZ out of the doldrums."

Source: Dnevnik

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