January 24, 2014 / 6:36 PM / 4 years ago

Sale of Croatia's railway cargo unit to Romanian buyer collapses

ZAGREB, Jan 24 (Reuters) - Croatia said on Friday a privatisation deal for the sale of state railway cargo unit HZ Cargo to a Romanian buyer had fallen through.

The Croatian transport ministry said in a statement the buyer, Grup Feroviar Roman, had changed some conditions for the purchase from those it put forward in a binding bid, and that it could not continue with the sale under such circumstances.

Grup Feroviar Roman, a member of Romania’s Grampet Group, was in talks to buy 75 percent of HZ Cargo. It could not immediately be reached for comment.

Grampet Group, founded in 1999, is the largest private rail group in southeastern Europe.

Croatia, the newest European Union member, is struggling to reduce its budget deficit from the current 5.5 percent of gross domestic product (GDP) to below three percent, as required by the European Commission which gave Zagreb three years - until the end of 2016 - to achieve that goal.

Privatising some state-owned companies and selling a concession for operating highways are part of Croatia’s plan to fill state coffers and reduce public debt which exceeded 60 percent of GDP.

The ministry said it would announce further plans for HZ Cargo next week. (Reporting by Igor Ilic; Editing by Mark Potter)

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