Bulgaria's Railway Companies Garnished by Lenders

Bulgarian Transport Minister Danail Papazov argues that the Bulgarian State Railways can successfully deal with financial turmoil. Photo by BGNES

The main offices of Bulgarian State Railways and National Railway Infrastructure Company have been placed under injunction upon lenders' request.

As of April 16, 2014, the state-owned companies can neither sell nor put out to lease their main headquarters buildings, both located near the Central Railway Station Bulgaria's capital Sofia.

Over BGN 600 M (EUR 300 M) of debts accumulated by the two entities are behind the lenders' actions, Expert.bg has revealed.

German banks such as KMS and KfW, Austrian Ka Finanz, and Bulgarian KTB and BNP Paribas are among the biggest debt-holders.

Negotiations with FMS are reportedly the toughest for Bulgaria's government, as it finds it difficult to convince bank representatives they should allow a delay of a total BGN 60 M (EUR 30 M) worth payment.

It was precisely FMS that garnished the assets of Bulgarian State Railways back in February. The latest decision to impose interdiction on properties was however made by the debholders' assembly, which convened earlier this week.

Deputy Transport Minister Anton Ginev was quoted by Presa Daily as saying that the move will not have any impact on activities of the two state entities.

Debts of Bulgarian State Railways have dwindled by BGN 100 M (EUR 50 M) over the past year, Danail Papazov, who heads the Ministry, has argued, with an envisaged BGN 50 M cut until the end of 2014.

Papazov made clear on Tuesday that the government will not allow the State Railways to declare bankruptcy.

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