Romanian Govt Clears Public Roads Auth To Borrow RON200M To Refinance Old Loan

The loan, which is covered by privatization proceeds, will be granted in September for a period of three years and nine months, a grace period of two years and three months with an interest rate equal to the central bank’s key monetary policy rate, plus four percentage points, according to an ordinance approved by the government.

The loan will be paid back starting December 2012 in four equal quarterly installments. The interest rate will be paid quarterly starting December 2009.

The government said it allowed CNADNR to contract a new loan because the company couldn’t pay back the old loan this year from its own revenues, which have decreased in recent months.

It also said that failure to adopt the decree would actually prevent the company from paying back the old loan, which would subsequently result in foreclosing payment obligations and blocking bank accounts.

In March this year, the government approved a normative act allowing CNADNR to borrow RON190 million from the country’s Treasury, over a two-year period. This loan must be paid back starting March 2010, in four equal quarterly installments.

In 2004, the government approved two decisions as regards granting two loans of RON200 million and RON190 million, respectively, to CNADNR in order to cover the company’s losses in the previous year.

The loans were covered from the general current account of the country’s Treasury for a five-year period, with due reimbursement and annual interest rate payment starting January 2007.