The Slovenia Times

DARS Enabled to Refinance Its Debt

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The law, which received bi-partisan support, is seen as crucial for the company's long-term financial health and refinancing of the debt amassed in the past through the construction of the motorway network.

The law enables DARS to get guarantees for annual refinancing of up to EUR 300m in principal or debt instrument annuities.

Finance Ministry State Secretary Metod Dragonja explained it would enable refinancing of loans in the total amount of just over EUR 2.6bn, taken by DARS in the past to finance motorways construction.

While the entirety of DARS's financial liabilities is secured with state guarantees, it needs a new guarantee for debt restructuring due to the mismatch between available funds and liabilities in the coming years.

The government expects this would reduce the cost of debt refinancing and ensure DARS to have a free cash flow of about EUR 75m at the annual level for motorway network maintenance and urgent investments.

For the financing of potential new motorway sections, the government will put forward a special bill related to the preparation and adjustment of the follow-up motorway construction programme, Dragonja said.

The bill received broad support from across the aisle with the ruling coalition Party of Modern Centre (SMC) underscoring that state guarantees would enable DARS to secure the cheapest possible financing at a time of low interest rates.

"We can say [DARS] will be able to borrow in the given situation cheaper than in the past", which would enable sustainable debt servicing in the coming years and to reduce potential state liabilities, SMC MP Bojan Krajnc said.

Likewise, the opposition Democratic Party (SDS) welcomed the law's key solutions with MP Marko Poga─Źnik saying the borrowing situation in the market was auspicious.

The opposition United Left (ZL) even voiced the belief that the adoption of the law cancelled out the main motive for DARS's privatisation, which MP Luka Mesec said would be "outrageous".

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