The European Bank for Reconstruction and Development (EBRD) is providing a €100m long-term, multi-currency loan to Polish railway freight operator PKP Cargo.
PKP will use the loan to fund the acquisition of transport and logistics operator Advanced World Transport (AWT), which was purchased by the railway freight operator last May.
AWT has operations throughout central Europe and its acquisition will provide PKP with seamless border crossings with the Czech Republic, better infrastructure, and the potential to become a specialist supplier for cross-border intermodal loads.
The company said that a focus on intermodal operations is a key driver for expansion on the Baltic-Adriatic-North Sea railway transportation corridor.
Following the acquisition, PKP will be able to develop new routes and provide comprehensive logistics and shipping services in an extended transportation corridor.
The privatisation of the firm was launched in October 2013 and is currently 67% owned by private investors. In the same month, the EBRD supported the company’s IPO with the acquisition of a 5.1% stake, which was sold by the bank last year.
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By GlobalDataEBRD transport director Sue Barrett said: "This is a very important step for PKP Cargo as the firm starts implementing its ambitious plans for the future.
"Strengthening rail transport not only makes business sense but is also good for the environment as it will reduce carbon emissions."
Following the privatisation, PKP Cargo began an expansion programme to increase its role in the central European railway freight market and reduce its dependence on the domestic market.
In 2014, the company had about 25,000 employees and moved 28.5 billion tonne-kilometres of freight.
PKP CARGO Group management board member in charge of finance Lukasz Hadys said: "Signing the contract with the European Bank for reconstruction and development confirms the credibility of PKP CARGO.
"We have ambitious goals for the years to come which we will achieve only through the implementation of key investments.
"The PKP CARGO Group is an international firm, which, thanks to good financial security, has an opportunity for further development."
Image: The EBRD loan will allow PKP to fund the acquisition of Advanced World Transport (AWT). Photo: courtesy of EBRD.