BUCHAREST (Romania), February 5 (SeeNews) – The Bucharest municipal court has opened a pre-insolvency procedure for state-owned rail freight operator CFR Marfa, the court appointed administrator - Casa de Insolventa Transilvania (CITR), said on Wednesday.
The pre-insolvency procedure, known as concordat, aims to help CFR Marfa achieve a quick financial recovery while continuing its operations and respecting its obligations to creditors, CITR said in a press release.
"CFR Marfa is an important company in the Romanian economy. We will focus our efforts together with the company in order to identify optimal recovery solutions depending on the current context. We have pledged to contribute to the restructuring of state-owned companies and we are ready to capitalize on our long-standing expertise in the private sector for the recovery of the railway operator," CITR senior partner Aurel Podariu said.
CITR and CFR Marfa will come up with a recovery plan within 30 days, and will submit it to creditors who own at least 75% of the company's debt among themselves. The implementation period of the measures in the restructuring plan is 24 months.
In December, the European Commission said it has opened an in-depth investigation into Romanian state aid for CFR Marfa, saying debt write-offs may have given the company an unfair advantage in breach of EU state aid rules.
The Commission's investigation will be looking at a number of state support measures in favour of CFR Marfa, such as a debt-to-equity swap amounting to 1.67 billion lei ($386 million /350 million euro) in 2013 and at the failure to collect, since at least 2010, the social security debts and outstanding taxes of CFR Marfa, and of its debts to CFR Infrastructura.
CFR Marfa, the incumbent fully state-owned rail freight transport services provider in Romania, has been in economic trouble for a number of years. It was incorporated as a joint stock entity in 1998, following restructuring of Romania's railways company SN CFR.
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