Slovakia's ZSSK Cargo sells wagon fleet to Cargo Wagon

ZSSK Cargo has sold its fleet of 12,450 standard freight railway wagon to Cargo Wagon, a new joint venture company founded to acquire the Slovakian state rail freight operator's fleet.

Under a sale-and-lease-back agreement, Cargo Wagon will manage this fleet and will lease back 8,218 wagons to ZSSK Cargo for a long-term.

ZSSK Cargo will receive €216.6m for the sale of railway wagon  and it will be used for decreasing the indebtedness of the company.

In July 2013, the Slovakian Government approved the Ministry of Transport's proposals for the restructuring and part-privatisation of ZSSK Cargo, which was hit by the economic downturn and the sharp decline in the country's steel industry.

The ministry launched an international tender in October 2013 seeking a strategic partner for ZSSK Cargo's wagon fleet and AAE Cargo was awarded the contract in 2014.

As part of the restructuring, Cargo Wagon has been founded in which ZSSK Cargo will hold a 34% stake, while the remaining 66% stake will be acquired by AAE Wagon, which was acquired by VTG earlier this year and a group of investors.

VTG Aktiengesellschaft CEO Dr Heiko Fischer said: "This is the first sale-and-leaseback transaction of any state railway wagon fleet in Europe. It could be the prelude to a fundamental redefinition of the investment and risk partnership between wagon hire companies and railway undertakings which dates back several decades.

The fleet transaction is subject to approval from the relevant antitrust authorities and the process is expected to be completed in May 2015.

Železnicná spolocnost Cargo Slovakia operates freight railway transportation services, carrying 36 million tons of goods in 2014.