Romanian state-owned railway freight company CFR Marfa, which went through two failed privatization attempts this year, will axe 2,50 employees next year, according to its 2014 budget.

After the layoffs, which are expected to bring a cost of almost EUR 4 million in compensation damages, CFR Marfa will have some 6,300 employees.

After the failed privatization, the Romanian Government agreed with the main financier the International Monetary Fund (IMF) to restructure the company 'aggressively', by cutting staff costs, selling old wagons as scrap metal, and stopping deliveries to clients with debts towards the company. Another privatization attempt will be made after the restructuring, with a deadline in May 2015, according to a document quoted by Mediafax newswire.

The sale of 51 percent in CFR Marfa to the bid winner Grup Feroviar Roman GFR, represented by its founder and main shareholder Gruia Sandu, couldn’t be completed by the October 14 deadline.

In a statement, the company said that GFR was called to the Transport Ministry on October 14 to be told that the privatization ended, as two procedures had not been fulfilled.

According to Sandu, some of the lenders of CFR Marfa did not agree to change the company’s shareholder structure and the Competition Council did not have enough time to green light the takeover.

CFR Marfa is the largest railway freight carrier in Romania with a turnover of EUR 261 million in 2011 and a loss of EUR 22 million.

editor@romania-insider.com