Israeli Companies Interested in Bulgarian Military Plants Israeli companies are interested in Bulgaria's military plants and it is possible that they participate in the forthcoming privatization of Military Machinery Plants - Sopot and Kintex. This emerged after a meeting of Bulgaria's minister of economy, energy and tourism Traycho Traykov with Israeli companies from the military business in Jerusalem. Minister Traykov was part of the delegation accompanying PM Boyko Borissov on his state visit to Israel a couple of days ago. Traycho Traykov had meetings with the heads of Israel Military Industries and Israel Aerospace Industries. The two companies work in the field of military and aviation equipment. During the meeting were discussed the possibilities for cooperation with Bulgarian companies manufacturing and marketing products for the military industry and products for household use as well. Israel Military Industries was founded in 1933 and is specialized in development, manufacturing and maintenance of defence systems on earth, air and sea. Its products form part of the equipment of the Israeli army, US air forces, army and navy and NATO.
Source: Standart (15.01.2010)

Vazov Machine Works (VMZ) in Sopot has started operations on one of the two contracts for manufacture of grenades and RPG's for the Middle East. The contractor state has already transferred part of the amount in advanced, confirmed the armory director Eng. Ivan Stoenchev. The management uses the money to pay the current salaries and advances to its employees. Old debts of 80% of two salaries and an advance payment are still pendulous. However, VMZ hopes that soon the advance payment on the contracts with the other Middle Eastern country, which is of higher value, will arrive as well. Eng. Stoenchev did not disclose details as it is a matter of special products.
Source: Pari (12.02.2010)

Bulgaria to Produce Bullets for US Army While on a visit to Washington, Bulgaria's Minister of Economy, Traycho Traykov negotiated on the opportunities for Bulgarian armour producers supplying the US Army with ammunition. On the last day of his visit he talked with representatives of ATK (Alliant Techsystems) a leading producer of defensive and space technologies with three daughter companies - ATK Armament Systems, ATK Mission Systems and ATK Space Systems. The Minister discussed with the company managers the possible participation of Bulgarian companies as subcontractors in contracts of the ATK for ammunition supply of the US Army as well as for possible privatization of Bulgarian VMS Sopot armouries. Experts from the company estimated highly the quality of production of the Bulgarian armament and defence industries.
Source: Standart (09.04.2010)

The strategy for the sale of VMZ-Sopot will be ready on August 20 Emil Karanikolov, Executive Director of the Agency for Privatization and Post Privatization Control Mr. Karanikolov, you have recently been appointed Executive Director of the Agency for Privatization and Post Privatization Control. What do you think about your new position? - I assumed this post on June 1. I feel highly responsible and committed to my new professional tasks and I will do my best in order to come up to the expectations of the Council of Ministers. I think that both of my colleagues from the Executive Board, a lawyer and an economist by education, are outstanding professionals. In the last two months we successfully worked together and managed to build a great team. In this short time period we were able to outline our vision on the continuation of the process of privatization and post-privatization control. We have reached an agreement on our most important goal – how to preserve and protect the public and state interests. I would also like to emphasize on the constructive dialogue which we have with the Agency’s Supervisory Board. The sale of Bulgartabac will start soon. Do you think that the forecast of Minister of Economy, Energy, and Tourism Traicho Traikov for revenues of at least ˆ100 mln from this transaction is well-grounded? - I understand that this is a deal that has focused the public interest over the years. However, we have not been able to finalize it yet. Therefore, we should approach the privatization of the holding very carefully. The contract with Citigroup, the investment consultant, was signed by the Agency’s Executive Board and submitted for review to the Supervisory Board. We are waiting for its decision. With respect to the expectations of the possible acquisition price of Bulgartabac, I hope that we will be able to achieve even better price parameters than these, specified by Minister Traikov. But as you well know the current market situation is quite unfavourable. So there is no valid contract with the consultant for the moment and he is not working on the deal? - Yes, this is the current situation. But we have learned from talks with Citigroup that their team is making preliminary market research. According to them, at this stage, there is an indicative interest in the cigarette holding company. At what stage is the privatization of VMZ-Sopot - another widely discussed issue, for which no real work has been done so far? - About a month ago, I got acquainted with the strategy for the privatization of VMZ-Sopot (a top mechanical engineering plant from the defence industry sector). According to this document, Bulgarian investors are not allowed to participate in the privatization of the company. This is not acceptable. Therefore, the Minister of Economy assigned a Working Group in charge of updating the strategy. The deadline for this task is August 20 and I am Chairman of the Working Group. We have already drafted our proposals and have sent them for approval in SANS (State Agency for National Security) and the Ministry of Interior. So we will keep the deadline scheduled. The strategy will then be submitted for review and approval by the Council of Ministers and subsequently to the National Assembly. As soon as the Parliament approves it, we will start to work actively on this transaction. What are your expectations regarding the enterprises from the list of companies banned for privatization? When will they become part of the companies the Agency works with? - My colleagues from the Executive Board and I closely examined those companies listed in Annex 1 of the PPCA (Privatization and Post-privatization Control Act). We have started preliminary discussions with various Ministries in order to establish which of the companies under their jurisdiction could be removed from this list. We have a positive answer from the Ministry of Regional Development and Public Works. They agreed to remove several of their companies from the list. But I do not want to comment before the final decision is made. You know that such a change has to be approved first by the Government and then by the National Assembly. Usually, such actions create a conflict of interest between the Agency for Privatization and the various Ministries, as these companies would no longer be directly subordinate to the Ministers. Some of the companies might turn out to be already private enterprises, despite being included in the list of companies banned for privatization – one good example is the International Fair Plovdiv. What is the situation at the moment? - I am happy to work in good coordination with all Ministers. I can even say that they appreciate the need of such talks and of the update of the so called list of banned for privatization companies. For example, we are currently negotiating the possibility to take out from the list the Industrial Zone – Svilengrad company. I believe that the Ministries themselves are interested in the removal of some of their enterprises from the list and their subsequent privatization. They admit that these companies have only accrued losses for the State. Their revenues are much less than their expenditures. If a company is performing well, I understand the need to be maintained as a State – owned in order the revenues from its activity to be kept in the budget. But when it produces merely losses, it is better for the State to get rid of it.
Source: Class (16.08.2010)

Minister of Economy Traycho Traykov invited the global aviation giant Boeing to explore investment opportunities in Bulgaria and to participate in the privatization of Vazov Machine Works in Sopot. Minister continues meetings with leading companies, financial and trade institutions within his visit in the U.S.
Source: expert.bg (20.09.2010)

Bulgaria will try to sell off its struggling arms maker VMZ Sopot at a one-stage bublicly announced competition, according to the latest strategy about the company announced by the Ministry of Economy. The plan was cobbled together by a working group that brought together experts from the economy ministry, the Privatisation Agency, the foreign ministry, national security agency DANS and the company itself. The strategy will now be tabled for approval with the Council of Ministers and the National Assembly. “We’ve managed to stabilise the company and we’ve secured orders by next March,” VMZ executive director Ivan Stoenchev told Dnevnik. He revealed that the company has paid off BGN 11 million of its debt to the local tax authorities and has to settle a further some BGN 50 million. The debt has been rescheduled since 1996 with monthly payments worth approximately BGN 450,000 at the moment.
Source: Dnevnik (04.10.2010)

Bulgaria plans to sell through the Bulgarian Stock Exchange (BSE) assets for about BGN 411 million next year, said the head of the Privatization Agency (PA) Emil Karanikolov. Plans are to sell minority stake in the tobacco company Bulgartabac Holding and minority stakes in other energy companies and factories. The government has already committed to Citigroup Global Markets Inc. to advise the sale of tobacco holding.
Source: Class (07.10.2010)

Budget gap will be filled by sales of not used diplomatic residences. Most likely the company, which manages the real estate deals - Domestic Diplomatic Properties Agency (ADIS), will be offered for privatization. BGN 300 million may come into the treasury from privatization deals, said PM Boyko Borisov. By year-end the financial memorandum for Bulgartabac will be ready, as well as the offer for sale. The 33-percent share of E.ON is already put on the counter. This will also happen in the other two EDC's soon. The state-owned Avtomagistrali is also considered by the Privatization Agency. However, the company will probably be put for sale next year. Tehnostroyimport is already removed from the prohibitive list for sale. The State will also arrange an auction for the Vazov Machine Works in Sopot. The cabinet is determined to collect any penalties on companies that have not complied with the conditions of privatization contracts.
Source: Standart (18.10.2010)