City makes deal to buy spa renovator's debt at steep discount

Museums

Budapest city leaders have made a deal to buy the debt of Rác Nosztalgia, a troubled project company that renovated the historic Rác baths, from the Hungarian Development Bank (MFB) at a steep discount, business daily Napi Gazdaság said on Friday. The press department of the Budapest mayor's office confirmed the agreement for the paper, but MFB's press department did not immediately respond to a query. The city agreed to take over Rác Nosztalgia's more than HUF 7 billion in debt for just HUF 2.7 billion, acquiring a majority stake in the company, the paper said. The renovation of the Rác baths - one of a handful of Turkish baths in Budapest - and the construction of a hotel at the site was completed more than two years ago, but a row over the capital's stake in Rác Nosztalgia prevented it from reopening. Mayor István Tarlós said in January, when Rác Nosztalgia's bankruptcy protection ended, that talks with MFB on conditions for an agreement allowing the baths to reopen were ongoing. MFB provided a €23 million loan for the project.

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