Bulgaria Moves To Sell Debt-ridden Ammo Maker VMZ Sopot Faster
Bulgaria's parliament said it adopted legislative amendments that should make it easier to sell heavily indebted ammunition manufacturer VMZ Sopot after a privatisation attempt failed earlier this month.
Under amendments to the privatisation bill adopted on first reading MPs took VMZ Sopot off the list of state-owned companies that could only be sold under a privatisation strategy approved by the chamber, parliament said on its website on Wednesday.
The amendments passed in a 76-8 vote in the 240-seat chamber aim to enable a faster sale of the 100% state-owned VMZ Sopot as the approved strategy for its privatisation has proven to be unfeasible.
The company's deteriorating financial state could lead to bankruptcy, in which case it was highly likely that its employees would not receive their salaries and the government would have to resort to a piecemeal sale of VMZ Sopot, parliament said.
The company, located in Sopot, in central Bulgaria, manufactures aviation and antitank missiles and artillery ammunition.
Bulgarian machine building company Mehanichen Zavod - Devin filed an insolvency claim against VMZ Sopot earlier this month but the court postponed the hearing for February 18.
On January 14, the government's privatisation agency terminated the procedure for the sale of VMZ Sopot as the sole potential buyer, local company Emko, had failed to submit the required bank guarantee of 3.0 million euro ($4.0 million) after presenting its binding offer.
The Bulgarian government launched the sale of its 118 million shares in VMZ Sopot in early July in line with its privatisation strategy for the company.
In November, the government's asset-selling agency said Emko was the only candidate buyer admitted to the second stage of the privatisation procedure.