Deputy Transport Minister Anton Ginev has cautioned that the Bulgarian State Railways (BDZ) company faces bankruptcy unless its accounts are unblocked.

In a Monday interview for mediapool, he said that the talks on the matter with the creditors of BDZ were cumbersome and difficult.

In early February 2014, German financial institution FMS Wertmanagement froze the bank accounts of BDZ over overdue debts of EUR 11 M.

One year earlier, the assets of the cargo unit of BDZ, BDZ Freight Services, were frozen due to unpaid debts to Depfa bank.

Ginev made clear Monday that Germany insisted on solving the problem with the outstanding debts of the Bulgarian state-owned railway company on a governmental level, adding that a solution was unlikely to be reached soon.

Bulgaria's Deputy Transport Minister did not specify a deadline for the end of the talks but he assured that BDZ had the necessary sum of over BGN 10 M to pay the loan installment due in May.

Ginev also explained that it was good news that the debts of the company were decreasing, reaching BGN 620 M from a previous rate of around BGN 700 M.

He also noted that BDZ was considering creating a subsidiary specializing in repairs.

Ginev admitted that repair works were not profitable but he argued that efficient management combined with a minority private stake would help optimize the state-owned railway holding.

Ginev did not name the company with which BDZ was planning to set up a joint venture.

He said that an analysis was being made to select the repair units of BDZ which would become part of the subsidiary, given that the company had over 20 such sites based in Sofia, Plovdiv, Karnobat, Dimitrivgrad, etc.

Ginev claimed that the components of the subsidiary would be clear by mid-2014.

He also informed that the Transport Ministry did not plan to establish new state-owned companies.