Transport Minister Ján Figeľ has announced that state-owned railway freight carrier Cargo Slovakia will be able to repay a bank loan which had been in doubt, the SITA newswire has reported, quoting the minister. He said that Cargo is addressing the situation in cooperation with his ministry, which is its shareholder
"Cargo is solvent and can solve this problem. A year ago such an answer would not have been possible but now it is 'yes'," Figeľ said, as quoted by SITA. The debt of the company, which stood at some €600 million, or more than 82 percent of the company's equity capital, at the beginning of the present election term (i.e. in June 2010), was destructive, the minister said. It was necessary to adopt recovery measures so that the bank sector believed that all loans to date had not been lost and would be properly repaid. Without starting revitalisation of the railway company now, it would have been necessary to deal with the total bankruptcy of Cargo and a still deeper decline of the railway sector, he added.
A month ago, Cargo Slovakia announced that it was not asking the state for further help to improve its financial situation. The company added that it has been settling its obligations toward banks properly and on time. The company's management now says it is taking all steps necessary to repay a €13.5-million obligation to one of its banks by the end of August, and has stated that Cargo's financial stabilisation is on the short-term horizon.
Figeľ says that revitalisation of Slovakia's three state-run railway companies is necessary and that it was very important to initiate the current process. Cargo plans to reduce its overall losses this year to €55.5 million. Operating revenues are expected to increase by about 1 percent to €383.57 million and expenditure to fall by 23.7 percent to €298.34 million. Operating profits should therefore amount to €85.24 million.
The Železničná Spoločnosť Cargo Slovakia cargo railway company was established in early 2005 after the firm Železničná Spoločnosť split into two separate companies. Cargo took over its activities related to freight transport. Its share capital is €401.65 million.
Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
15. Aug 2011 at 14:00