Monday, November 22, 2010

BDZ mulls over debt rescheduling

Bulgaria's national railway carrier BDZ is seeking extensions on its obligations to banks and suppliers, as the company lacks funds to repay them on schedule, financial director Metodi Hristov said.

Currently, BDZ owes BGN 170 million to suppliers and another BGN 50 million to financial institutions.
The size of the company's delayed debt payments could soar to BGN 60 million by the end of the year in a worst-case scenario, he noted.

According to Hristov, BDZ's creditors could request insolvency, although there have been no such indications so far.

Among the railway carrier's creditors are German KfW Ipex and the Bulgarian Development Bank, but BDZ owes the largest portion of its debt to Railway Infrastructure Holding for using its infrastructure.

The operator expects to cover its arrears on the back of an increase in revenues and asset sales, including 600 carriages and several holiday houses, seen to fetch between BGN 32 million and BGN 50 million.

As part of BDZ's restructuring into holding, the company will also reduce costs by BGN 15 million and resort to job cuts.
It also expects to draw a BGN 460 million loan from the World Bank in order to build the company back to life, with negotiations between the parties still running.
(Dnevnik)

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