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PKP Cargo and OT Logistics may recapitalize Croatia’s HZ Cargo

Polish PKP Cargo and OT Logistics are indicated as potential investors in the Croatian state-owned rail freight carrier HZ Cargo. After last year’s failed privatization attempts Croatian government is currently searching for a company  interested in recapitalizing HZ Cargo.

Croatia’s government earlier increased HZ Cargo’s capital through a debt-for-equity swap by EUR 127.1 million, however in order for this move to be in accordance with EU rules, private companies will have to recapatilise HZ Cargo with an amount equal to at least 40% of that amount, news portal Vecernji List reported.

An international tender for the recapitalization of the rail freight operator will be launched when the European Commission gives the green light, Vecernji said.

The most likely candidates to invest around 400 million kuna in HZ Cargo are PKP Cargo and OT Logistics, which have already shown interest in entering the ownership structure of the Croatian company, Vecernji said, adding that it has learned their local partner in the deal would be gas distribution company Prvo Plinarsko Drustvo.

In March, PKP Cargo signed a strategic cooperation agreement with HZ Cargo in line with its expansion strategy focused on Central and Southern Europe.

In July, OT Logistics said that in order to ensure its growth in Southeast Europe it bought 2.8 million new shares issued by Croatian port operator Luka Rijeka as part of a capital hike, making it its second largest shareholder with a 20.81% stake.


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