4 Bidders Eye Bulgaria's Troubled Military Plant

Business | August 27, 2012, Monday // 11:20|  views

The privatization of military plant VMZ Sopot was launched on July 10 by Energy and Economy Minister Delyan Dobrev and Labor Minister Totyu Mladenov. File photo

Four bidders have purchased documents for the public tender for the privatization of VMZ Sopot, Bulgaria's largest, but troubled defense industry plant.

The deadline to sell 118 000 000 shares from the plant or 100% of its capital, which was already extended once, expired at 5:30 pm on Friday, August 24.

Documents were purchased by the Sofia-based Sage Consulting SA and Emko Ldt, the Ruse Dunarit SA and by lawyer Tihomir Trendafilov from Sofia.

The information was reported by the State privatization agency.

According to a check of the Trade Registry, conducted by the Bulgarian 24 Chassa (24 Hours) daily, Dunarit SA deals with design, manufacturing and trade of military products, industrial explosives, equipment for repair and maintenance of railroad tracks, plastic and metal parts, and utilization of ammo. It is linked to the President of Corporate Commercial Bank, Tsvetan Vassilev.

Sage Consulting deals with a wide range of activities such as weapons trade, ammo, real estate, and construction. Emko is also involved in a variety of activities such as legal, financial, business, translating consultations and services, creation, restoration and trade of art objects, ownership of art galleries, and repair of munitions, among others.

Attorney Trendafilov told 24 Chassa that he represents a foreign client from the defense sector, but added the latter wants to remain unidentified for the time being.

All bidders will be required further in the process to submit certificates for access to classified information and proof of having the required qualifications. They must hold licenses for both weapons trade and manufacturing.

The evaluation criteria for the offers would be the proposed purchase price, investments and job openings. The deposit for participation is set at EUR 3 000 while the deadline for the bids is December 27 2012.

Bulgaria's Economy and Energy Minister, Delyan Dobrev, has assured that the privatization strategy for VMZ Sopot envisaged a commitment for the buyer to keep the plant's activity, its workers and its human resources expenses.

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.

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Tags: Emko, Sage Consulting, Tsvetan Vassilev, Dunarit, privatizaiton, Delyan Dobrev, Energy and Economy Minister, VMZ Sopot, military plant, Totyu Mladenov, Labor Minister, unpaid wages, Sergey Stanishev, Bulgarian Socialist Party


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