Bulgaria to start privatization of Largest Military Plant July 10
The privatization process for VMZ Sopot, Bulgaria's largest defense industry plant, is to be launched Tuesday, according to Energy and Economy Minister Delyan Dobrev.
In a Thursday interview, he stressed that the state could no longer afford to seek money to pay the salaries of the plant's workers every other month, which was why it would go private.
Dobrev explained that the privatization strategy adopted by Parliament in 2011 envisaged a commitment for the buyer to keep the plant's activity, its workers and its human resources expenses.
Bulgaria's to Energy and Economy Minister voiced optimism that VMZ Sopot would attract investor interest due to the fact that it was part of the defense industry sector and despite its huge debt burden.
"In the last few years, weapons exports have been growing and Bulgaria made it into the world's top 10 of weapons exporters last year," Dobrev pointed out, adding that the preliminary data for 2012 were also good and the segment was also expected to be on the rise.
He also informed that a total of BGN 1 M had been provided to cover a share of the unpaid salaries of the workers at the plant.
Employees of VMZ Sopot are to receive over BGN 1.5 M in unpaid salaries.
The VMZ Sopot plant, located in central Bulgaria, has a total staff of 3 700 workers.
The plant was founded in 1936, and during the communist period was developed into a large-scale military industrial unit.
VMZ Sopot produces anti-tank guided and unguided missiles, aviation unguided missiles, artillery ammunition, fuses.
It also manufactures civilian products – it makes diamond tools, abrasive discs and grinding wheels, gas cylinders, food industry equipment, and household appliances.
VMZ Sopot has been in a troubled financial condition in the last few years.
In 2007, Bulgaria's Privatization Agency started to sell some of the plant's assets in order to cover part of its debts; some of its assets were also sold at the beginning of 2009.