Croatia greenlights €1.8bn debt restructuring of road management companies

Croatia greenlights €1.8bn debt restructuring of road management companies
By bne IntelliNews March 29, 2018

The Croatian government decided on March 29 to offer state guarantees for loans worth €1.8bn that road management firms will take out to refinance their debt, and announced further financial restructuring in the sector.

The Croatian road sector has been plagued by high debt and corruption scandals. The debts of state-owned road companies amount to €5.2bn, or 13% of the total public debt.

The new loans totalling €1.8bn include €1.1bn for Hrvatske autoceste, €467mn for Hrvatske ceste and €202mn for Autocestu Rijeka Zagreb, the government said in a statement. The loans will mature in March 2030.

“By adopting these decisions, we will ensure the stability of the road sector in the next 15 years and debt has become sustainable. The motorways remain in the hands of the Croatian citizens and the system is being reformed in order to make it profitable,” Transport Minister Oleg Butkovic said.

He added that 60% of the road sector’s debt has been refinanced. Butkovic expects the debt to be fully repaid by 2030.

Last year, Croatia enjoyed very favourable market conditions, which enabled the country to save HRK800mn (€106.1mn) by restructuring and refinancing debt at lower prices, Finance Minister Zdravko Maric said in December.

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