site.btaWorld's Largest Rail Transit Equipment Supplier to Invest Lv 300-400 Mln in Rolling Stock Plant in Bulgaria

World's Largest Rail Transit Equipment Supplier to Invest Lv 300-400 Mln in Rolling Stock Plant
in Bulgaria

Sofia, March 2 (BTA) - China Railway Rolling Stock Corp. (CRRC), the world's largest supplier of rail transit equipment with an annual turnover of some 45,000 million dollars, will invest between 300 and 400 million leva in a plant for locomotives and wagons in Bulgaria, Bulgarian Transport, IT and Communications Minister Hristo Alexiev told journalists in Cherepish (Northwestern Bulgaria) on Thursday, after a ride that he, Prime Minister Ognyan Gerdjikov, other cabinet members and chiefs of diplomatic missions took on a vintage steam-powered train between Sofia and Cherepish.

The CRRC has contacted the Bulgarian State and is expected to send a letter of investment intent within two weeks. The investor does not claim sovereign guarantees. The idea is to use the existing facilities and, on this basis, to build new capacities for the manufacture of rolling stock meeting the demand of both the Bulgarian State Railways (BDZ) and the railway operators in the region for a period as long as 15-20 years, Alexiev said. The Chinese are inclined to apply a lease-like scheme, in which they initially finance the entire investment in new rolling stock which will recoup itself within, say, ten years.

The Transport Minister added that the investors are also willing to refinance the BDZ's 260 million leva bond debt, which will make it possible to refinance the operator's current obligations as well, so as to ensure long-term stability. Alexiev said that the Chinese company will commit an estimated total of 500 million leva, which may reach 600 million leva because it includes a restructuring and refinancing of BDZ's debt.

The investment will be repaid by the capital transfer from the State to the BDZ, and the Chinese investors see this as sufficient guarantee to be able to loan-finance such a project.