Government gives guarantee for loan for HZ restructuring

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The Croatian government on Thursday gave the state-owned HZ rail company a guarantee for a loan totalling HRK 1.18 billion, which would be used for the restructuring of HZ Cargo, HZ Passenger Transport and HZ Infrastructure.

HZ Cargo will take out a loan of HRK 345 million for financial consolidation and severance pay for surplus labour, and HZ Passenger Transport will use HRK 217 million for the same purpose. HZ Infrastructure plans to borrow HRK 170 million to improve cash flow and a further HRK 450 million for infrastructure modernisation and construction.

The Deputy Prime Minister for Economic Affairs and Minister of Regional Development and EU Funds, Branko Grcic, said this was a serious reform move as HRK 1.18 billion would be directly invested in restructuring the entire national rail operator.

Only 250 million of this money will go towards severance pay for surplus labour, while the rest goes directly towards development, new projects and liquidity, Grcic said.