June 1 (SeeNews) - Bulgaria's government will have to provide aid to indebted state-owned railways operator BDZ Holding to prevent a halt in its operations, finance minister Vladislav Goranov said on Friday.
"If we want the railways operator to be sustainable, in addition to the hundreds of millions, given from the central government budget each year, this means of transport should be legally prioritised in some way," Goranov said in a press release issued by the ministry.
Last week, the Sofia City Court froze 40 million levs ($23.9 million/20.4 million euro) in bank accounts held by BDZ Passenger Services, a unit of BDZ Holding, due to BDZ Holding's failure to make payments due on its 120 million euro bond which matured in 2017, Velik Zanchev, deputy transport minister, said in a video file posted on the website of public TV station BNT.
BDZ Passenger Services is a co-debtor on the bond issue.
In 2007, BDZ successfully placed a 10-year 120 million euro bond issue, consisting of 120,000 bonds with a nominal vlaue of 1,000 euro each. The issue carries a floating rate of 3M EURIBOR plus a premium of 3.5% on an annual basis. BDZ planned to use proceeds from the bond placement to finance repairs of rolling stock and refinance existing debt.
(1 euro = 1.95583 levs)