Bulgarian state railways company BDZ will restructure its freight unit, BDZ Tovarni Prevozi, ahead of selling a stake in the company.
The Bulgarian Ministry of Transport said the unit cannot currently be sold as its assets are owned by its parent company, and investors will not come forward to purchase the operations and the company's debts.
The ministry plans to transfer the assets of BDZ Tovarni Prevozi and BDZ's passenger transportation unit, BDZ Patnicheski Prevozi, to its subsidiaries, leaving only the parent company for strategic planning and financial oversight.
But such a transfer still needs the approval of the state railways creditor banks.
BDZ is seeking a loan of about BGN460m ($322m) to help finance debt payments and cover operational needs.
The restructuring plan is the outcome of BDZ’s negotiations with the World Bank and the European Bank for Reconstruction and Development for raising the loan.
Germany's Deutsche Bahn and Austrian rail freight transportation company Rail Cargo Austria had earlier expressed interest in BDZ's freight unit, which will be restructured by 2011, according to sofiaecho.com.