Strategic investors for three of the companies of the "International Railway Systems" group

The official receiver of "Astra Vagoane Arad", "Romvag" and "Meva", companies which are part of the "International Railway Systems" (IRS) group, is looking for investors, to allow the successful reorganization of the three companies, which became insolvent last year and have dire need of cash.

Arin Stănescu, the manager of "RVA Insolvency", the official receiver of "Romvag", said: "The three companies are in dire need of strategic investors to carry out their reorganization plans. In this case, the court appointed receivers of three companies are working together and we have decided, in agreement with the majority shareholder of the company and with the creditors to begin selecting investors, with which we would then draft reorganization plans. We have already begun negotiations with three-four reputed companies. The reorganization plans must be ready by April-May, by which time we hope to find investors".

Rudolf Vizental, the representative of "Solve Insolve" IPURL, said: "There are two types of investors that we are talking to, and we approach each type differently: investment funds and makers of wagons used for transporting goods. We are currently talking to 2-3 makers and two investment funds and we hop to complete the restructuring plans in April".

Up until 2009, the IRS group, controlled by notorious businessman Cristian Burci, was the largest maker of freightcars in Europe, with a market share of 30%. Since then, the market for freight cars has contracted dramatically, and "Meva" Drobeta-Turnu Severin, "Romvag" Caracal and "Astra Vagoane Arad" have come to have serious cash issues in 2010.

The three companies have a syndicated loan of about 100 million Euros to pay back. The lenders are RBS Romania, ING Bank, Piraeus Bank and Citibank Europe. According to the official receivers, the banks are lenient on the three companies, and are supporting the reorganization plans. The official receivers of the three companies claim that the three companies have become insolvent not only due to the syndicated loan coming due, but also due to the fact that the three companies of the IRS had a faulty settlement of the internal payments within the group. This led to a high level of mutual debts, with the three companies being both debtors and creditors.