Bulgarian State Railways (BSR) is seeking an international loan from various financial institutions to help finance debt payments through 2014.
The rail operator is in contact with the World Bank, the European Bank for Reconstruction and Development, Deutsche Bank and UniCredit Bulbank for the $298m loan.
The funding will be used to repay debts to suppliers and for the maintenance of railways, according to Bloomberg.
Other austerity measures include staff reductions, diversification of services and the expansion of freight and passenger revenue by 19% and 24%, respectively.
The operator will use the loan to re-stabilise the company and enter into partnerships with major European carriers while looking at options to set up a joint venture or fully privatise the freight unit.
BSR will also sell 4,000 locomotives to help cover the company's financial shortfall, which has been attributed to the global economic downturn and mismanagement.