Банкеръ Weekly

Briefs

SOPOT-BASED ARMOURY WILL RELY UPON KINTEX

Ten months after the meeting at the Ministry of Economy regarding the future of the Sopot-based Vazov Machine-building Plants (VMZ) /military production/, on February 12, 2001 there was another meeting on the same topic. This time, however, instead of leading the meeting, Levon Hampartzoumian, former Vice Minister of Economy, joined the 'round table' as PA Executive Director, while debate was managed by Ivan Ivanov, the new Vice Minister of Economy. Nikolay Georgiev, Vice Minister of Finance, also joined the debate. After a discussion of almost three hours, it was announced that the latter has made the committment to reschedule for three years the payment of BGL24MN of the total BGL46MN endebtedness of the VMZ to the state budget.
We'll make our best to find a strategic investor for the special production, said to the Banker weekly Levon Hampartzoumian, PA Executive Director. According to him the armour products of VMZ will have future if they become part of the NATO supply system. This is the long-term perspective - a restructured defense industry. This is valid not only for the Sopot-based plants, but also for the other companies of the military industry, whose product range corresponds both to the needs of Bulgarian army and to those of our NATO partners, added Hampartzoumian.
The legal analysis and the company evaluation are ready, but a certain update of these documents is also necessary, in view of separating VMZ autonomous parts which will be offered for sale as independent companies.
PA would facilitate the potential investors by letting make due diligence of the companies they are interested in. This may help in the timely clearance of certain information gaps regarding their legal and financial and economic status.
Ivan Ivanov, Vice Minister of Economy, had one good and one bad news. The bad one was that the Sopot-based armoury will have to dismiss additional 2000 workers out of the 7000 employed there. More than 10,000 workers were employed in VMZ till mid 1999.
The good news was that in April 2001 there will be a profitable order, which would provide for about 2000 workers. Participants at the meeting said they have agreed not to disclose details of this salvage deal. It is almost sure, however, that this is a contract with Kintex, a Bulgarian armour trading company, of which the Banker weekly has informed in November 2000. Kintex's order is for 100,000 pcs of special units, against which VMZ will receive USD16MN.

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