Montenegro plans to merge two railway firms - report

There is need for urgent action since Odrzavanje Zeljeznickih Voznih Sredstava (OZVS) is on the brink of bankruptcy, public broadcaster RTCG quoted transport minister Filip Radulovic as saying over the weekend.

Radulovic noted that the merger is the best and only solution to avoid bankruptcy according to an analyses made by the Faculty of Economics of the University of Montenegro in Podgorica and by consultants from the European Union.

"Our intention is to create a single company that will be efficient and financially sustainable, and will be of benefit to the state and all citizens. The merger of these companies will also reduce costs since we will no longer have two boards of directors and two management teams," Radulovic was quoted as saying.

According to latest available company data, OZVS' loss widened to 614,300 euro ($668,500) in January-September 2023, from 578,500 euro in the like period of 2022. Its accumulated loss totalled almost 8 million euro at the end of September when its capital stood at 13 million euro.

At the same time, ZPCG saw its nine-month profit dropping to 971,000 euro from 1.43 million euro in the first nine months of 2022. Its accumulated loss totalled 24.5 million euro at end-September 2023, while its total capital amounted to 16.6 million euro.

As of February 5, the government controlled 85.4% of OZVS and 90.8% of ZPCG, bourse data showed.

OZVS shares last traded on the Montenegro Stock Exchange on August 11, gaining 20% to close at 1.22 euro. ZPCG's shares last traded on March 21, closing flat at 0.399 euro.

($ = 0.919 euro)