The government has authorized state-owned railway company MÁV to issue HUF 35 billion in state-guaranteed bonds this year to cover expenses that are not covered by the state budget, a government resolution dated August 22 and published in the official gazette Magyar Közlöny on Monday shows.

Because of the urgency of the transaction, MÁV has been allowed to refrain from inviting a public tender for the issue, though the company must obtain offers from at least three applicants.

The bonds will be placed privately and will have a run of no more than three years.

The government will provide the guarantee free.

The state will take over up to HUF 300 billion of debt from state-owned railway company MÁV under a government decree published in early August. The national development minister shall submit a proposal for a cost-efficient restructuring of the company that will ensure it does not continue to run up new debts by September 30.

The decree, which also approves the takeover of the debt of Budapest public transportation company BKV and the buyout of PPPs, corresponds to plans outlined in the Széll Kálmán Plan, a restructuring program the government presented in March.