Negotiations reach a halt

On January 24, the Ministry of Maritime Affairs, Transport and Infrastructure informed the representatives of Bucharest-based S.C. GRUP FEROVIAR ROMAN S.A. about the impossibility of proceeding with the sale of the HŽ Cargo company.
 
Despite mutual willingness to conclude a sale contract on the purchase of 75% HŽ Cargo shares, during the negotiation process significant deviations arose from the terms given in the binding offer, thus making it impossible for the Croatian negotiating team to continue under these circumstances.
 
Some of the reasons why the Ministry cannot proceed with the negotiation process are the following:
 
S.C. GRUP FEROVIAR ROMAN S.A didn't ensure any relevant proof that they can provide a guarantee to substitute the currently valid state guarantee (which was additionally verified with creditor banks with which the Romanian company had contacts).  
 
Contract proposal sent by the S.C. GRUP FEROVIAR ROMAN S.A. company was not even close to being harmonized with the tender conditions, i.e., binding offer conditions.
 
Prerequisites for the conclusion of a transaction for which the state should issue adequate additional guarantees are indicated in this contract proposal.
 
In addition, it was unacceptable to request from the state to assure the following: that no other operators will be on the market in the upcoming period, for issues related to assets which are currently treated as public good to be entirely solved, for the government to take redundancy costs upon itself. There was also a request that the state should ensure the extension and exclusivity of the contracts with main HŽ Cargo customers, and finally, that the state takes over financial risks arising from outcomes of all existing legal disputes.
 
The last request for one more due diligence process to take place was also not acceptable, since all available data was given during the previous two due diligence processes; therefore, an additional one was unnecessary. The only data not shown refer to the commercial conditions of the contract with HŽ Cargo customers, which represent a trade secret until the moment when clear proof of assurance is presented that the transaction will surely be taking place.