Thursday, May 09, 2013

Omnitrax bidding in Romania

Written by  William C. Vantuono, Editor-in-Chief
The Romanian Government on May 8 received three bids for the sale of a 51% stake in CFR Marfă, the national rail freight operator, and U.S. short line operator Omnitrax is one of them. Omnitrax is bidding against Romania’s two largest independent rail freight operators—Grup Feroviar Român, and Transferoviar Grup, which is part of a consortium with Austrian-based financial investors Donau Finanz.

The planned sale has been under discussion for around ten years but was held up due to a lack of political support. It will be undertaken as a trade sale, assuming the bids are high enough; a minimum reserve price of €180 million has been set for the 51% share and the results of the auction will be announced in June 2013.

CFR Marfă owns more than 900 locomotives—most of which are greater than 20 years old—and nearly 40,000 freight cars—less than half of which are in service, according to International Railway Journal correspondent Keith Fender. The company lost approximately €47 million in 2012, following a 10% reduction in traffic, compared to 2011.