Reuters: Bankruptcy News: Bulgaria cancels sale of ailing arms plant

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Bulgaria cancels sale of ailing arms plant Jan 14th 2013, 15:37 SOFIA | Mon Jan 14, 2013 10:37am EST SOFIA Jan 14 (Reuters) - Bulgaria has cancelled the sale of state-owned arms producer VMZ Sopot after the sole qualified bidder failed to file a valid offer, bringing the indebted plant closer to insolvency. "We received a binding offer but we did not receive the mandatory deposit of 3 million euros ($4 million), so we had to cancel the procedure," privatisation agency chairman Emil Karanikolov told the national radio. According to Karanikolov, Bulgarian arms maker EMCO revised its plans to take over the country's largest state producer of anti-tank and aviation missiles, grenades and ammunition after finding it could not lay off workers without trade unions' consent. The leading CITUB trade union has said EMCO planned to cut the 3,200 staff at the plant in half and that it opposed this. VMZ Sopot's debt exceeds 150 million levs ($102 million), including unpaid salaries for about 2 million levs, trade union officials said. The centre-right government, worried by an ongoing strike at VMZ Sopot over unpaid salaries, has been hoping a sale could be sealed by Jan. 23 and the plant could avoid insolvency. Karanikolov said insolvency could be avoided if the Balkan country allowed the sale of the plant to restart without a strategy which bans investors from laying off workers. ($1 = 0.7493 euros) (Reporting by Angel Krasimirov; Editing by Mark Potter) Link this Share this Digg this Email Reprints

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