Government to Hold Talks Bulgarian State Railway's Lenders

Creditors of national carrier Bulgarian State Raliways (BDZ) are due to meet Deputy Prime Minister Daniela Bobeva on Tuesday to discuss the fate of the company.

International lenders are expected to elaborate on their refusal to slash Holding BDZ's debt by 30%, Bulgarian daily Standart reports.

Sofia had earlier offered the step and promised to bring forward the repayment period from 10 to 6 years, but its proposal was turned down.

As of end-June BDZ owed some BGN 170 M (roughly EUR 85 M) to the creditors as part of a second bond loan granted in years, with BGN 76 M of them being overdue.

A group of banks lent the money to BDZ, which had pointed the need to repair old wagons and deliver on previous liabilities.

On Tuesday's meeting Bobeva will also discuss with lenders the prospect that the German railway company Deutsche Bahn could take the lead of BDZ and restructure the carrier, merging it will the National Railway Infrastructure Company to form a single holding.

The move could see Germany (which is DB's majority shareholder) enforce its presence in BDZ, the creditors of which are mostly German banks, state-owned KfW and private FMS Wertmanagement included.