As the 28th member of the EU (as of 1 July 2013), Croatia gradually tries to align to the European legislation and to implement the EU policies. Aware of the implications that the EU accession has on railway transport, the authorities have initiated a series of processes regarding the business segment of the freight operator HZ Cargo aimed at improving business operations, competitiveness, integration into the European transport system, all in all, the implementation of market liberalization.
For Croatia, the liberalisation of railway services means one of the greatest challenges of a company which has initiated a process of reshaping and transformation of its role regarding both the organisation and its ownership structure. Moreover, reducing the intensification of transport, determined by the economic crisis, which led to drops of the freight volumes from 17 million tonnes (in 2007) to 11 million tonnes (in 2012), represents the main issue in preserving liqui-dity (a problem which affects the company at present) and in paying long-term debts. In January 2013, the Ministry of Transport and Infrastructure invited potential investors to express interest in HZ Cargo. The process involves the restructuring of the company and the possibility to purchase a stake. The invitation was launched following the government’s decision of finding a strategic partner for HZ Cargo which ended 2012 with an estimated loss of around HRK 91 Million (EUR 12.1 Million).
In May, the Croatian Government adopted the report on the procedure of collecting the letters of intent and negotiations with potential investors on changing the ownership structure. After launching the bid, the Ministry of Transport announced it received seven letters submitted by the consortium Nexus Private Equity Partneri d.o.o (in behalf of Nexus FGS fund) – Quaestus private Equity d.o.o. (in behalf of Quaestus Private Equity Kapital II)-Đuro Đaković Holding d.d. and companies DEAL d.o.o., AT Kearney GmbH, Rail Cargo Austria AG, DB International GmbH, Grup Feroviar Român (GFR) and Advanced World Transport (AWT) B.V.
Following evaluation, only four companies of the total seven have been invited to submit offers for the acquisition of HZ Cargo. The potential investors are the consortium Đuro Đaković Holding, Questus Fund and Nexus Fund, Advanced World Transport B.V., GFR and Rail Cargo Austria. The offers of the companies will be analysed in conformity with the proposed restructuring plan and investors will be able to buy a stake of 75% in the Croatian national freight operator, the rest of the shares being managed by the state.
The Ministry of Transport has reviewed the offers and has invited companies to present their plans and the possibility to participate in the restructuring process. Consequently, the potential shortlisted buyers will have the opportunity of analysing HZ Cargo’s operations.
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