The privatization of state-owned Hungarian railway company MÁV’s spun-off freight unit has been closed and the purchase price transferred by the buyer, Rail Cargo Austria, MÁV CEO István Heinczinger announced on Tuesday.
A consortium of RCA and GYSEV won a tender in May 2007 to buy 100% of MÁV Cargo with a bid of HUF 102.5 billion and a promise to spend HUF 44 billion on developments at the company within five years. GYSEV later withdrew from the tender because of competition issues aired by the European Commission. Rail Cargo Austria has become the biggest rail freight company in Central and Eastern Europe, and the third-biggest in all of Europe, said board spokesman Friedrich Macher.
MÁV Cargo will continue to remain one of MÁV’s biggest partners, paying its former parent an annual HUF 40 billion in track usage fees, Heinczinger said. Answering a question, Heinczinger said MÁV would use about HUF 30 billion of the proceeds from the privatization to replenish capital. The rest will be used to refinance working capital loans with unfavorable conditions as well as to make investments that improve the company’s level of service, though this will require approval by the state.
Rail Cargo Austria will decide how to spend the promised HUF 44 billion in development money as it carries out its growth strategy, Macher said, answering a question. Rail Cargo Austria provided an employment guarantee in the contract for MÁV Cargo. In order to implement the growth strategy, the company will need the required number of qualified staff, Macher said. Rail Cargo Austria does not want to simply add the performance of the two companies together, rather it aims to expand output. Rail Cargo Austria will sell its stake in GYSEV -- a condition for the MÁV Cargo purchase stipulated by the European Commission -- and the Hungarian state has expressed interest in buying it, Macher said.
The states of Hungary and Austria own 61% and 33.3% of GYSEV, respectively. RCA unit Spedition Holding owns the remaining 5.7p%. Asked by MTI, Mr Heinczinger said MÁV is in talks with the Budapest Public Transportation Company (BKV) on taking over its suburban rail line, HÉV, but the details have not yet been decided on. Business daily Napi Gazdaság reported on Monday that MÁV would buy the HÉV for HUF 30 billion. (MTI-Eco)