Delyan Dobrev, Bulgarian Minister of Economy, Energy and Tourism, in an interview for Focus Radio.


Host: The fate and future of VMZ Sopot, Bulgaria’s biggest military equipment manufacturer, is one of the hot topics today, as from today the company is in a privatisation procedure. Bulgarian Minister of Economy, Energy and Tourism Delyan Dobrev had a meeting with the workers and the management of the company this morning. For more details about the meeting and the future of the company we will talk with Minister Dobrev in the next minutes. Let us start with the meeting – how did your meeting in VMZ Sopot go, Mr Minister? What are your impressions?
Delyan Dobrev: The meeting went really well. We acquainted the employees and members of the trade unions in the company with the start of the procedure for privatisation, which was triggered officially today, after it was published in the State Gazette. I also acquainted them with the realistic terms, in which the privatisation should be completed, because only privatisation will resolve the problems in VMZ Sopot, which have been going for nearly 18 years. The first problems with delayed wages started in 1994.

Host: The wages were probably one of the most important topics for the people working in VMZ Sopot. What assurance can you give the employees? I suppose that you have actually already done that this morning, but please tell our listeners what are the assurances for the people’s wages?
Delyan Dobrev: We assured the people that we were looking for options for the period of privatisation, which could be between three and five months. We will try to provide additional orders to the company in this period, provided by Kintex, or another company, in order to guarantee the wages in this period. I am very shocked by the statement of former prime minister Sergey Stanishev [Sergey Stanishev, Chairperson of the Bulgarian Socialist Party (BSP) and President of the Party of European Socialists (PES)], who said that the company VMZ Sopot may be sold dirt-cheap and then cut for scrap. This cannot happen. I guess Mr Stanishev forgets that the National Assembly adopted a privatisation strategy in March 2011, which guarantees that the activities of the company cannot be changed for at least five years and the buyer should be a strategic investor, which has to guarantee the production of military equipment and machines, as well as to guarantee the regular salary payment and employment of the workers. I think that Stanishev’s words are an absolute speculation. There is no risk for the company to be sold to someone, who will cut it into pieces and sell it as scrap. Moreover, Mr Konstantin Trenchev [President of the Confederation of Labour Podkrepa] gave an example with the past, when BSP were in power, and a big arms deal was supposed to be realised with the help of Mr Trenchev. The deal, however, was rejected by one of the executive directors of the company, who said that he would never sell weapons to Americans. People have been trying to lead this company to bankruptcy over the last 20 years with their bad management, and these very people now talk about selling the company cheaply, when you bear in mind that the company has debt of BGN 145 million. The final offer will be higher than BGN 145 million, as this debt will be included in the deal. It is a fact that the company was decapitalised back in 2007, when Mr Stanishev was Bulgarian PM. This means that the debt of the company exceeds its assets, and some of the creditors of the company could declare it insolvent. A way out of the situation had to be sought back then and the company should have been sold to a strategic investor.

Host: You said that you should find a buyer of VMZ Sopot in the next three months. Has any company declared interest in the company, already, or are there any such signs?
Delyan Dobrev: The procedure will last 165 days. Actually the maximum term of the procedure for privatisation is set at 165 days. We hope that we will optimise some of the terms, because the term in which SANS should make an inspection of the candidate-buyers is 90 days. We hope that this inspection will be done quicker, so that we can make strong progress in three or four months. Unofficially, interest has already been declared. We, however, cannot confirm the sources of this interest, no matter how serious their intentions seem, and we cannot announce any names of companies or make any prognoses. The situation of the company is really grave. As I said, the company’s debt is BGN 145 million, and this will be a big obstacle towards finding many bidders. Nonetheless, we are optimists and think that will be able to finish the privatisation of the company in this term.

Host: Last question, Minister Dobrev. What is the importance of VMZ Sopot for the Bulgarian economy? After all attempts are being made to save this company, so it can continue working.
Delyan Dobrev: It is very important this company to continue working, not so much for the sake of the Bulgarian economy. The production of the company, as a part of the country’s GDP is extremely small. For the very town of Sopot, however, this company is extremely important, and it also is vital for the whole region. More than 3,300-3,400 people work in this company, and if we do not manage to save it, they will be left without work, and the situation in the region will deteriorate seriously. That is why I think that saving this company will be vital for the Sopot region, and not so much for the Bulgarian economy.