Romania’s government approved a debt-to-equity swap for state-owned railway company CFR SA to meet pledges to the International Monetary Fund and the European Union.
The Bucharest-based Cabinet wants to convert a 4 billion- lei ($1.2 billion) debt into CFR shares and boost the company’s capital, said government spokesman Dan Suciu in a phone interview today. CFR accumulated the debt from unpaid bills and penalties, Suciu said.
The Balkan nation, which secured a 5 billion-euro ($6.7 billion) precautionary loan from the IMF and the EU, is seeking to lower its budget deficit to 1.9 percent of gross domestic product this year from 4.35 percent last year and cut the costs of running state-owned companies.
The government pledged to the lenders to sell a majority stake in CFR’s unprofitable freight unit, CFR Marfa.
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