Minister Traikov invites German companies to participate in the privatisation of Kintex Minister of Economy, Energy and Toursim, Traicho Traikov, invited German investors to participate in the forthcoming privatisations in Bulgaria, including the sale of the arms dealer Kintex. This happened in Berlin, during the eighth session of the Bulgarian-German Cooperation Council, organised by Commerzbank, the second largest bank in Germany. Among the other companies, slated for divestment which Traikov mentioned are Bulgarian Posts, VMZ-Sopot, minority stakes in the electricity distribution companies, the Shumen heating facility, the State’s stakes in the free zone in the towns of Burgas, Plovdiv, Svilengrad and the transit trade zone in Varna. In order to sell Kintex, a strategy for the company’s divestment should be approved first since the state-owned arms dealer is an important company for national security. The idea of selling Bulgarian Posts is similarly controversial and the company remains on the prohibitive list for privatisation, at least for the time being. Traicho Traikov also presented the opportunities for new investments in the spheres of energy and energy efficiency, the construction of treatment facilities, infrastructure, transport, outsourcing and logistics.
Source: Class (03.02.2012)

The opportunities for the privatization of the Bulgarian Posts and the Bulgarian State-Run BDZ Freight Services were discussed in Berlin during the visit of Bulgaria’s minister of economy, energy and tourism, Traycho Traykov who attended the session of the Bulgarian-German Cooperation Council. Investors showed higher interest in the privatization of the railway company. The participation of German companies in the privatization of VMZ Sopot, Kintex, the minority stake of the power distribution companies, the state participation in the free economic zones, etc., as well as for new investments in the spheres of energy and energy efficiency, infrastructure, transport, outsourcing and logistics.
Source: Standart (03.02.2012)

Bulgaria's government plans to privatize this year a minority stake in the state-owned energy holding, which groups the country's top energy assets, the finance minister has confirmed. Talking in parliament at the end of the week, Simeon Djankov said the government aims to sell a stake of between 10 to 25% in state energy company BEH (Bulgarian Energy Holding) via a foreign stock exchange by the end of the year. The deal is expected to raise "several hundred million euros". Bulgaria's government is expected to list its 33% minority stake in E.ON and CEZ power distributors in April and May respectively in a bid to enliven the local stock exchange and boost revenues.
Source: Darik Radio (27.02.2012)

Workers in VMZ Sopot, Bulgaria's largest military plant, have threatened to resort to civil disobedience unless they receive their delayed salaries. The employees of VMZ, which is located in the town of Sopot in Central Bulgaria, have not received their payments on time in the past 1.5 years, the Bulgarian National Radio reported Friday citing local unionists. The syndicates insist that Bulgarian Economy Minister Delyan Dobrev approve a request for a company loan for the still state-owned arms producer so that the workers can get paid and the plant can purchase raw materials for its produce. "The problems at VMZ Sopot have been dragging out for years but this time the workers demand the intervention of the Economy Ministry in order to overcome the situation," Ivanka Ivanova, head of the local organization of the KNSB (Confederation of Independent Bulgarian Syndicates) is quoted as saying. "At present, the employees are yet to receive part of their January 2012 salaries, the April salaries, and advance payments on their June salaries; the May salaries will be soon be due as well. It's really hard! There is social tension not only in the VMZ factory but also in the entire region because the factory employees over 3 000 people. We've got entire families working here!" she added. Ivanova did stress that VMZ Sopot is not short of orders, and that it can be a successful producer. "The VMZ management has done everything necessary to request a company credit but the Economy Minister's approval hasn't been granted for 2 weeks! We do have contracts on which we are supposed to work. I am saying "supposed to work" because we work with whatever raw materials we have got. We have clearly stated in our letter to the minister that we will undertake syndicate and civil actions," the union leader elaborated.
Source: 24 chasa (25.06.2012)

IME: Liberalisation of postal services sector moves too slow The liberalisation of Bulgaria's postal services sector is already underway, but progress is too slow, according to a research of the Institute for Market Economics (IME), presented in Grand Hotel Sofia. Restructuring of the monopolist Bulgarian Posts presents the greatest challenge, for the most part because of its inherent obligation to deliver nation-wide comprehensive postal services (CPS). Yavor Alexiev from IME says this business model makes it difficult to optimise operations and company structure since the monopolist is currently unable to offer alternative forms of performing CPS that comply with the Communications Regulation Commission's requirements. Officials from the association of postal services operators, counting Bulgarian Posts among its members, pointed out another major problem - the insufficient amount of preparatory work in terms of rules and regulations in the last few years in order to set the stage for the liberalisation of the sector. IME's report identifies two trends that have been sources of big shifts on the postal services market in recent years. First, information technologies are increasingly depressing the volume of traditional postal services, correspondent's orders and letters in particular bearing the brunt of the hit. On the other hand, the advance of electronic trade suggests an ever greater demand for courier services. A big jump in these can be expected next year, participants in the discussion said.
Source: Class (04.07.2012)

Over the next three months must to find a buyer for VMZ Sopot, economy and energy minister Delian Dobrev said in the meeting with the leadership and workers in Sopot enterprise. Energy minister and labor minister Totyu Mladenov launched Tuesday the privatization of VMZ Sopot, Bulgaria's largest defense industry plant. The privatization process is to be wrapped up within 165 days, during which the state is to clear all of the company's debts, including unpaid salaries to its workers, according to reports of the Bulgarian Telegraph Agency (BTA). In three months' time, the plant is to be bought by a strategic investor which is in the same sphere of production. The bidders are to become clear in 30 days, after which the State Agency for National Security (DANS) and the special services are to launch inspections. Bulgaria's energy minister announced Tuesday that the privatization strategy for VMZ Sopot had already been approved by Parliament. He vowed that the workers at the military plant would be paid their salaries for May by July 20 and the salaries for June would be transferred on July 28. On Friday, the staff of VMZ Sopot received their salaries for April and 50% of the salaries for January. Dobrev argued that the state would ensure the timely payment of the workers' salaries through new orders for the plant. Employees of VMZ Sopot are to receive over BGN 1.5 M in unpaid salaries. The trade unions at VMZ Sopot called off the strike and said they would expect the government to keep its promises. Bulgaria's Energy Minister assured in a Thursday interview 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. "Bulgaria's government needs to make clear-cut commitments as regards VMZ Sopot because the company is of crucial importance for Bulgaria's military industry," Sergey Stanishev, leader of the Bulgarian Socialist Party (BSP) stated. He suggested that VMZ Sopot could be tasked with the utilization of ammunition, instead of the government pouring money into private companies with low-skilled workers. Stanishev further called for strict monitoring of the privatization process, warning that the plant could be sold very cheaply. 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.
Source: Standart (11.07.2012)

Bulgaria’s largest defense industry plant in Sopot (VMZ) has two big orders from NATO, plant’s CEO Ivan Stoenchev said. VMZ Sopot is the only company in Bulgaria that has signed such contracts with NATO after the Alliance invited tenders for its orders worldwide. Stoenchev said further that very soon the plant will seal a contract with one country in the Middle East, it has been working towards it for two years. It will be another new order from the Arab country. Currently the plant doesn’t have orders in Bulgaria, to procure them the country has to need military equipment and invite a tender.
Source: Standart (12.07.2012)

Turkish investors are interested in the state plant VMZ Sopot, said Executive Director of the Agency for Privatization and Post-Privatization Control – Emil Karanikolov. In his words, Turkish businessmen have expressed interest in the deal for the military plant, but so far no investor has bought tender documentation. There is plenty of time for that, as the deadline expires on August 8. According to Karanikolov, it is very likely that purchase of documents will happen in the last moment, as the current practice shows. A month ago, interest in the VMZ Sopot was shown by Asian and Russian companies.
Source: Standart (18.07.2012)

The term for buying documents for participation in VMZ Sopot’s privatization is to be extended by two more weeks. The final date now is 24 Th of August. The state decided to extend the announced term, due to high interest. 118 million shares will be sold in that way, equaling 100% of company’s capital. The main reasons of extension of announced term are hopes for better offer. Candidates for VMZ can only be strategic investors - companies that produce special products. Turnover in the last three years must be at least BGN 120 million, and earnings may be not only of military production. The buyer will be required to maintain the average number of employees (between 3200 and 3500 people) of the company and change of ownership to pay its public obligations.
Source: Capital (10.08.2012)

Israeli Company to Interest in VMZ Sopot Israel’s Elbit Systems is the third company that will buy documents for participation in the tender for Bulgaria’s VMZ Sopot defense industry plant. In Bulgaria, the company is known mainly for its innovative solutions for the army and, in particular, the air force. Elbit Systems has also won a number of foreign procurements. The fifteen-day extension of the procedure for privatization of VMZ Sopot, announced by the Agency for Privatization and Post-privatization Control, is now underway. A hundred percent of the plant’s capital has been put on the counter. The buyer has to be a strategic investor that will produce the same line of goods.
Source: Standart (13.08.2012)

Weak explosion for VMZ Three Bulgarian and one foreign companies bought tender papers for the Vazovski Mashinostroitelni Zavodi (VMZ) – Sopot, the Privatization Agency announced. Only two of them stand a chance to meet the criteria for the candidates, thus the competition would hardly be strong. The main flaw of the company is that it is entangled in debts and lately has had no orders. Still, its privatisation does not seem impossible as it is full of assets. So far the name of the foreign company has not been announced. The Bulgarian candidates are arms dealer Siege Consultants, Emko and Dunarit. Due to the requirements for a minimum of BGN 120 million income for the past three years Dunarit, a Ruse arms factory that is related to banker Tsvetan Vasilev, might not be allowed to compete. Dunarit is associated with Vasilev as one of the members of its Board of Directors – Nikola Kirov, is a member of the management of the Fina-S Financial House, owned by Vasilev. Also, the majority owner of the Ruse company is Kemira, that along with Fina-S and other companies of Vasilev is registered at the same address in “Krasno Selo” residential district in a branch of Corporate Commercial Bank (CCB).
Source: Capital (27.08.2012)

Three local arms companies continue in the privatization contest for VMZ. These are namely Emko, Dunarit and Sage consultants. Participation of two of them is strange, as they are not in line with the terms of the strategy and papers of the procedure. The companies do not have necessary assets. Consortia are not allowed for participation, as well. Emko seems to be the sole company that covers all requirements for turnover for the last three years to the amount of BGN 120 million. The company as well is a producer of ammunition, which covers the definition of a strategic investor. The other two candidates-Dunarit and and Sage have assets below the required BGN 120 million.
Source: Capital (03.09.2012)

The workers of VMZ Sopot, Bulgaria's largest military industrial plant, are set for a one-hour warning strike to protest the fact that their salaries have been delayed, a syndicate announced. VMZ Sopot's more than 3 200 employees have not received salaries since July 2012, and their financial situation is very bad, explained Dimitar Atanasov, local head of the Podkrepa ("Support") Labor Confederation, as cited by Mediapool. He elaborated that even though the state-owned military factory has orders from clients, it is unable to execute them because Bulgaria's National Revenue Agency has frozen its accounts because of its debts to the state amounting to about BGN 150 M. "We insist that the tax agency remove the distraint on our bank accounts so that we can buy raw materials for our products and thus get the workers paid," Atanasov reiterating a call that has been made by a number of union leaders in the past couple of years. He emphasized that Bulgaria's other major trade union, the Confederation of Independent Bulgarian Syndicates (KNSB), has also backed those demands, and that the two syndicates will join their efforts in coordinating the workers' protests. Atanasov said the military plant employees are prepared to blockade the east-west road running through Central Bulgaria.
Source: Dnevnik (23.10.2012)

VMZ Co. Sopot to be sold by the end of November “Having streamlined all terms concerning VMZ Co. Sopot’s privatisation procedure, we now expect it to be over by November 30,” Delian Dobrev, Minister of Economy, said after he met with the Social Minister Totyu Mladenov to discuss workers’ protests because of unpaid salaries. For the last three or four months, we have been working to secure more contracts for VMZ Co. Sopot, but the situation in the company is so dire that things have come to choosing between paying the workers and buying materials, Dobrev said. “We will do our best to complete one of the contracts in the next few days, so we can pay at least part of what the workers are due,” he vowed. The three potential buyers are expected to submit their bids by October 29. The new owner, which will be determined by the Council of Ministers, will be required to liquidate all VMZ Co. Sopot’s public liabilities and take responsibility for any salaries left unpaid, according to Emil Karanikolov, head of the Privatisation and Post-Privatisation Control Agency. “We found the meeting useful insofar as we now know how the privatisation procedure has been progressing and that the deadlines have been shortened,” said Ivanka Ivanova of the Confederation of Independent Trade Unions of Bulgaria. A decision on the final amount that workers should receive is expected by Friday. There is no problem with the National Revenue Agency (NRA) or frozen bank accounts of VMZ Co. Sopot, Dobrev assured. When the procedure is finalised, the new owner will have to liquidate all liabilities towards the state so NRA has agreed not to pressure the plant’s management in the last month.
Source: Class (25.10.2012)

Three candidates for VMZ Co. Sopot to file documents on Monday The candidates for the privatisation of VMZ Co. Sopot are three and they have to apply for eligibility at the Privatisation and Post-Privatisation Control Agency on Monday, agency head Emil Karanikolov said. He explained for BNR's Sunday 150 show that these are Sage Consulting, Dunarit and EMKO, while Dunarit has already submitted the necessary documents. "The three enterprises are Bulgarian strategic investors and are known to the public. They are currently working with VMZ Co. Sopot and are familiar with it. As early as Tuesday, we will announce who has been admitted to the privatisation procedure," promised Karanikolov. He was adamant that the strategy for the privatisation of VMZ Co. Sopot does not permit lay-offs and wage cuts for three years after signing the deal. "Public liabilities are about BGN 47 mln. Liabilities to employees are about BGN 1.3 mln," explained Karanikolov. With respect to the privatisation of BDZ-Freight, the Executive Director of the Privatisation Agency said that the eligibility criteria were approved last week. On Friday, he informed that the second auction for the company will start within two weeks. The privatisation of the Domestic Diplomatic Properties Agency is also forthcoming and it has attracted a lot of interest, Karanikolov announced. According to him, it is expected to be sold and the money will enter the state budget next year.
Source: Class (29.10.2012)

Two bidders have been disqualified from the tender for the privatization of Bulgaria's largest military-industrial plant, VMZ Sopot, leaving Emko EOOD as the only eligible candidate, according to the website of the Privatization and Post-Privatization Control Agency (PPCA). The two other candidates who filed documents, Sofia-based Sage Consultants AD and Ruse-based Dunarit AD, do not meet the requirements of the privatization strategy for VMZ Sopot, according to the PPCA. All three participants who purchased tender documents managed to submit them by the October 29 deadline for preliminary evaluation. The PPCA asked Emko EOOD Sofia for clarification of the tender documents. The disqualification of the two companies was expected because only Emko EOOD has the necessary turnover of at least BGN 120 M for the past three years. The turnover of Dunarit AD slightly exceeds BGN 96 M, while Sage Consultants AD does not meet the requirement for being a producer, not a trader. Emko EOOD, which was set up in 1992, is a manufacturer of small arms and ammunition with Emiliyan Gebrev as sole owner. Emko EOOD made headlines in November 2011 after explosions in its former military ammunition warehouses near the village of Lovnidol, Sevlievo Municipality. The document submission deadline for the privatization tender of the Sopot-based plant was moved from December 27 to October 29 due to its serious indebtedness. According to data of Bulgaria's Ministry of Economy, Energy and Tourism, the debts of VMZ Sopot amount to over BGN 150 M, BGN 47 M of which it owes to the state. Apart from that, the wages of the workers at VMZ Sopot have been delayed by a few months. The privatization of VMZ Sopot is to be wrapped up by November 30. 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 over the past few years. In 2007, Bulgaria's Privatization Agency started selling VMZ Sopot assets in order to cover part of its debts; another portion of assets of the military plant was sold at the beginning of 2009.
Source: Capital (06.11.2012)

The Bulgarian Privatization Agency has adopted the clarifications requested by the only remaining candidate for VMZ Sopot – EMCO LTD. Only the company, which is owned by businessman Emilian Gebrev, was found eligible for the privatization of VMZ. Earlier this month, two other candidates, that had submitted documents, were removed from the contest - Sage Consultants and Dunarit. EMCO was requested clarifications for ongoing public duties. The condition was the company to pay them and to present evidence, as strategy requires from the prospective buyer to have none. EMCO will have 20 days to submit a binding offer. In late October, when VMZ workers said they were ready to strike over unpaid wages, the Minister of Economy Delian Dobrev asked to speed up privatization and to complete it by November 30, after deadlines are shortened. Prior to the transaction, the prospective buyer must pay all obligations to the state.
Source: 24 chasa (13.11.2012)

The breakthrough in the privatization of VMZ - Sopot will be next year. The reason is that on Monday the only candidate buyer for the state armory - EMCO will ask the Privatization Agency for an extension of the tender for one month, ie until January 27. The chances for the Executive and Supervisory Board to agree with the request are big because it is grounded. This was announced by CEO Emil Karanikolov’s department. The current deadline for submission of offers expires on December 12. But at a meeting Friday it clear that the applicant is actually doing due diligence (financial and legal studies) from the plant since November 20. The delay came because apart from the access to classified information, which EMCO has, it appeared that financial and accounting records are business secret. And in the short time remaining, the applicant will not succeed on the assessment and preparation of the bid. For comparison, the agency gave three months of the evaluator to prepare information documents for VMZ.
Source: Capital (03.12.2012)

Russians want the rail transport Probably, a large Russian private carrier stays behind the interest stated through Citibank for the privatization of BDZ-Freight Services, said the Executive Director of the Agency for Privatization Emil Karanikolov. According to him, there is serious interest in the cargo unit of BDZ by three investors. These are the largest private rail operator in Romania (Grup Feroviar Roman), the Czech company Advanced World Transport and large private Russian carrier. Karanikolov stressed that Russian interests no longer comes from the state-owned Russian Railways Company and the private company Freight One. Privatization procedure of BDZ – Freight Services is the second in a row since the first attempt failed due to lack of investor interest. If the state fails to sell the company now, it will remain for the next government as Karanikolov said that the government will sell up to 30 March. This is due to parliamentary elections next year and the wish not to mix the privatization with political games. This means that by the end of March 2013 the sale of BSE, Agency Diplomatic Properties, VMZ-Sopot and BDZ - Freight Services must be finalized.
Source: Standart (04.12.2012)

Bulgaria's privatisation agency said on Wednesday it extended until January 11 the deadline for filing a binding offer for a 100% stake in arms manufacturer VMZ Sopot. Potential buyers can inspect VMZ Sopot’s assets and meet the company’s management by January 4, the agency said in a statement. Bulgaria launched a privatisation procedure for the sale of 118,000,000 state-owned shares in VMZ Sopot in early July. In November, the privatisation agency said that local company Emko was the only candidate buyer admitted to the second stage of the sale procedure.
Source: investor.bg (13.12.2012)

Workers at VMZ Sopot go on indefinite strike Workers at VMZ Sopot went on indefinite effective strike. They demanded that the factory pay their due wages. Since September, employees in the munitions factory, which is deeply in debt and in a privatisation procedure, have received only BGN 60. Leaders of CITU and Podkrepa Labour Confederation at the factory, Ivanka Ivanova and Dimitar Atanasov, said that, currently, orders on several contracts are being carried out, and new agreements are expected to be signed soon, but, according to talks with the leadership of the factory, there is no money for remunerations. VMZ Sopot's CEO, Ivan Stoenchev, said that the total amount due to employees amounted to over BGN 2.3 mln. He emphasised that everything possible is being done in order to obtain remuneration funds, and, if not all, at least some of these should be secured. We are currently working on contracts, the money on which has already been spent in advance, and therefore, now, we will have to finish these contracts in order to close the page. That is why we are looking for cash in advance through other contracts, so that we can pay the amounts due, Stoenchev said.
Source: Class (14.12.2012)

Bulgarian Prime Minister Boyko Borisov and Minister of Economy, Energy and Tourism Delyan Dobrev are to meet with the managements of the two state-owned defense companies VMZ and Kintex, announced the government’s press center. They will discuss the financial problems of VMZ-Sopot and workers’ unpaid salaries. It is expected that the workers with the Sopot-based defense company will start receiving their unpaid salaries on Monday. On Sunday the prime minister held talks with the executive directors of VMZ and Kintex, Ivan Stoenchev and Vladimir Dichev. The meeting was attended also by Deputy Finance Minister Vladislav Goranov and it was agreed that Kintex would pay VMZ-Sopot two contracts worth BGN 1 million. The money will be transferred in two tranches of BGN 500,000 each on Monday and Friday. After returning from Athens, where he will attend the joint meeting of the Bulgarian and Greek governments, Boyko Borisov will confer with a potential buyer of VMZ-Sopot in order to speed up the privatization of the state-owned company.
Source: BGNes (17.12.2012)

9 more large companies and factories in the country lead to bankruptcy as VMZ Sopot. This is the number of companies, which currently owe over 12 pays to its employees. However they do not operate for a long time because they are in liquidation procedures. Some companies were publicly announced nearly a year ago by the Social Minister as irregular employers. At the beginning of the delay in wages Minister Mladenov asked the companies to be given to the prosecution. Among the companies are Automobile Transport - Pleven, clothing company from Kardzhali Bulgatex, Alen Mak - Plovdiv, and Sokol - Peshtera. Other companies are in construction, trading, manufacturing of metals, machinery and foodstuffs. The nine companies employ more than 5,000 workers. They will seek help from the Prime Minister to get their money.
Source: Standart (18.12.2012)

The remaining salaries of employees in Vazov Machine Works (VMZ) in Sopot for September have been paid, said the executive director of the plant Ivan Stoenchev. "On Monday, the advance was paid and today we paid the wages. Everything is settled," Stoenchev said yesterday. At one point we said on Thursday or Friday, and we paid them on Thursday," he added. Director of the plant said that they had not spoken with the strike committee. Maybe this will happen tomorrow (ed. note - today), but the demands from the labor dispute are running. Monday (December 17) at a meeting between Prime Minister Boyko Borisov, economy Minister Delian Dobrev the management of Kintex, was agreed to pay the workers a salary and an advance.
Source: Other (21.12.2012)