site.btaVMZ Ordnance Plant Board Replaced over Poor Financial Condition

The leadership of the State Consolidation Company (SCC) has replaced the Board of Directors of the state-owned VMZ Sopot ordnance plant, Economy and Industry Minister Kornelia Ninova told an extraordinary briefing on Friday, as quoted by her ministry.

Ninova gave three reasons for the decision: a poor financial condition of the plant in Sopot, Central Bulgaria, failure to pay dividend to the state, and selling assets behind the back of the SCC.

The minister recalled that in 2021 VMZ recorded a profit of BGN 3,107,000. In the first quarter of 2022, under the current Board of Directors, the company incurred a loss of BGN 1,640,000. For every BGN 100 of expenditures, it earned BGN 107 in revenues in 2021 and BGN 96 in the first quarter of 2022. The company debt grew by BGN 21 million in the first three months of 2022 alone.

VMZ failed to pay dividend to the state despite many reminders from the SCC, Ninova went on to say. She noted that the Council of Ministers required state-owned companies to pay the full amount of state dividend for 2021 by April 30, 2022.

Self-contained parts of VMZ were put up for sale without letting the SCC and the Economy Minister know about it. The assets in question included the Chevira Recreation Centre in Starosel, a hotel in Sopot and buildings in the Gara Kaloyanovo Industrial Zone, Ninova said.

She presented the new Board of Directors: Ivan Ivanov, who holds a degree from the Rakovski National Defence College and until recently served as governor of Sofia Region; Marian Yovchev, who studied at the Georgi Benkovski Air Force Academy in Dolna Mitropoliya and is a former long-serving employee and executive director of the TEREM Sofia military repair plant; and Kamen Sharaliev, a graduate of the Technical University in Sofia, an electronics and automation engineer, until now VMZ director for industrial equipment.

"In conclusion, I want to repeat that we will prove that state-owned enterprises can be managed professionally, competently, at a profit, and with care for the workers," Ninova said.