February 20, 2013

PKP Cargo to acquire ZSSK Cargo?

Written by  Erwin Reidinger
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PKP Cargo to acquire ZSSK Cargo? Erwin Reidinger

POLISH State Railways (PKP) subsidiary PKP Cargo has become the latest potential buyer to be linked with ZSSK Cargo as the Slovak government continues its search for a strategic partner for the ailing Slovakian state-owned railfreight operator.

Last month the prime ministers of the Czech Republic and Slovakia said the two countries were considering a merger between CD Cargo and ZSSK Cargo. However, CD Cargo is grappling with financial problems of its own, having made a loss of around €9m last year.

With doubts growing over the merger, PKP Cargo has started talks with ZSSK Cargo. PKP Cargo currently competes with ZSSK Cargo, operating freight trains through Slovakia into Hungary and it also holds a license in Austria. Cooperation would ease the situation between the two.

Furthermore, there is a real risk that ZSSK Cargo might lose significant coal and ore traffic in eastern Slovakia. US Steel's Kosice steelworks is currently for sale and if Russian or Ukrainian investors take over, as is widely anticipated, steel production is likely to move further east.

ZSSK Cargo has accumulated debts of €600m and the workforce is to be cut by 600 this year.

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