Ljubljana - The cargo division of the Slovenian rail operator Slovenske Železnice, SŽ-Tovorni Promet, and Czech EP Logistics International (EPLI) finalised their strategic partnership agreement on Friday to expand to foreign markets under a joint venture named SŽ EP Logistika in a bid to become a leading rail freight and logistics provider in the region.

Announcing the finalisation of the transaction, which was cleared by the European Commission last year, SŽ-Tovorni Promet said the two partners had high expectations from the merger.

They both expect the joint company to become one of the key players in freight transport and logistics in the region, which includes Croatia, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia, Slovenia, Austria, Hungary and Italy.

"Today's step marks the start of a joint project in logistics and freight transport. Slovenske Železnice (SŽ) has contributed SŽ-Tovorni Promet and Fersped to the partnership venture, while the Czech EP Logistics International has contributed an agreed amount of up to EUR 60 million," the press release reads.

The capital injection resources will be used by SŽ EP Logistika for investments and expansion to foreign markets.

Slovenske Železnice is a 51% owner of the new company and the Czech partner holds 49%. The strategic partner is willing to invest up to EUR 100 million in additional funds to SŽ EP Logistika in the coming years, in addition to SŽ-Tovorni Promet's co-investment in the venture.