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Budapest public transport at risk of default next month, mayor says - paper

Trams could come to a halt in the capital in November, mayor István Tarlós told business daily Napi Gazdaság unless city transport company BKV receives HUF 6bn and repays a loan expiring on October 17.

If the company cannot repay the HUF 5bn loan, its creditor bank can draw down the state guarantee backing it, the paper said. BKV also has a HUF 7.4bn loan expiring before the end of 2011 and a HUF 8.9bn loan expiring in January. Repayment of loans worth a further HUF 58.1bn will become due in 2012, for which the company has no coverage, the paper said.

Tarlós said BKV could soon find itself in an impossible financial position without government help.