Loan Might Secure Salaries at Bulgaria's Arms Behemoth

Industry | June 3, 2013, Monday // 11:53|  views

Bulgaria's new Economy and Energy Minister, Dragomir Stoynev, photo by BGNES

Money for the salaries of the workers at the Bulgaria's largest arms factory, VMZ Sopot, may be provided by a loan from another State company, Bulgaria's new Economy and Energy Minister, Dragomir Stoynev, explained.

This decision, however, has to be discussed by the Cabinet. The reason for it is that VMZ Sopot has procurements, but no capital, leaving the workers without salaries for months yet again.

"This is the short-term plan, which will not solve the problem," the minister explained, stressing that the new Cabinet refuses to follow the former government's policy of offering empty promises and shaking hands with people.

"This Cabinet wants to work the following way- when measures are tabled; they have to be in people's favor, to stabilize the factory, so that it works," Stoynev commented in an interview for the private TV channel bTV.

"The situation is really bad. The financial condition of the arms manufacturer is bad, it is undercapitalized. VMZ Sopot has total debt amounting to around BGN 170 M, including public debt of more than BGN 60 M. All assets of the factory are mortgaged or put in pledge as creditors' compensations," Stoynev said.

According to him, privatization of VMZ Sopot may solve the problem, but the next bidder has to offer a strong social program.

The previous attempt to sell VMZ Sopot collapsed after the sole bidder failed to submit a deposit together with the binding offer.

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Tags: salaries, corporate credit, debt, Dragomir Stoynev, Economy and Energy Minister, privatization, Privatization and post-Privatization Control Agency, military plant, arms factory, VMZ Sopot


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