EBRD makes unsecured loan to PKP Cargo S.A. to refinance the acquisition of Advanced World Transportation.(EBRD)

Project Description

Up to EUR 100 million equivalent senior, multicurrency, unsecured loan to PKP Cargo S.A. (“PKP Cargo” or the “Company”) to refinance the acquisition of Advanced World Transportation (“AWT”), the second-largest rail freight operator in the Czech Republic.

Project Objectives

The acquisition of AWT is seen as a key milestone in the Company’s strategy of international expansion. A focus on intermodal operations is a key driver for expansion on the Baltic-Adriatic-North Sea railway transportation corridor.  Following the acquisition of AWT, PKP Cargo will be able to take advantage of the AWT’s intermodal terminals, to develop new routes and provide comprehensive logistics and transportation services in an extended transportation corridor.

Transition Impact

The Project’s main sources of transition stem from: a) more widespread private ownership: and b) demonstration of new replicable behaviour.

The acquisition of AWT, with operations in the Czech Republic, Slovakia, Slovenia, Hungary, Germany, Romania, Bulgaria, Croatia and Poland, will be a milestone in the international expansion of PKP Cargo, supporting the implementation of the post-privatisation corporate strategy and will also allow the Company to obtain a more diversified portfolio less dependent on bulk transport within Poland.  If successful, the Project will demonstrate the commercial viability of the private model to other state-owned railway operators in the region.

The Project also facilitates one of the few cross-border transactions in the region. With the AWT acquisition, PKP Cargo will have access to seamless border crossings with the Czech Republic (a Technical Trust Agreement is already signed), better infrastructure (via the terminal in Ostrava-Paskov) and has the potential to become a one-stop shop for cross-border intermodal loads.  This should encourage modal shift from road to other modes, such as rail and waterborne transport.

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