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City seeks to buy spa renovator's debt at steep discount

The city of Budapest wants to buy the debt of the Rác Nosztalgia, a troubled project company that renovated the historic Rácz baths, from the Hungarian Development Bank (MFB) at a discount of more than 50%, daily Népszabadság said on Tuesday, without citing any sources. The renovation of the Rácz 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. Népszabadság said other investors beside the capital could be interested in buying Rác Nosztalgia's debt.