Bulgaria's largest arms factory, VMZ Sopot, is reportedly working on a number of unprofitable orders.

Ailing military plant VMZ EAD is currently working on a contract with the Defense Ministry for establishing the quality and technical condition, as well as increasing the lifespan by 3 years of, a total of 12 000 unguided rockets S-5KO and S-5MO and fuzes, according to reports of Trud daily.

According to Defense Ministry data, the contract for the service was worth BGN 5000, VAT included, and had been signed on December 28, 2012.

An inspection of the mass circulation daily showed that the contract had been endorsed by Valentin Radev, who acted as Interim Defense Minister while former Minister Anyu Angelov had been on leave.

Radev told journalists that the generals had all of a sudden insisted that the contract be signed as fast as possible and that the rockets be taken out of the storage facilities.

He suggested that the deal had been fast-tracked in a bid to help VMZ Sopot EAD at a time when orders had been scarce, while the staff of the arms factory had not received salaries for months on end.

Meanwhile, military experts claimed that only the transportation of one truck carrying military equipment to a site located 200km away cost around BGN 5000.

The workers at VMZ Sopot had had to inspect each rocket separately and to remove and check all electronic components, taking away the defective ones. They had also been ordered to detonate one in 100 rockets to see if they were technically fit.

Bulgaria's Ministry of Economy and Energy informed that the company had signed a contract with the Defense Ministry and was implementing it within the agreed deadlines.

At the same time, VMZ Sopot EAD reported that it had received orders from Bulgarian companies for the production of 2305 rockets S-5KO and 5000 rockets S-5MO since the beginning of 2013.

A few days ago, the Defense Ministry confirmed that the first batch of 6000 rockets had been returned to the storage facilities of the Army, adding that the order for the remaining 6000 rockets was being implemented.

VMZ Sopot has a staff of 2100 with unpaid salaries for a few months, as well as debts amounting to BGN 170 M.

All assets of the state-owned VMZ Sopot have been placed under a mortgage or pledged as collateral of creditors.

Bulgarian Economy and Energy Minister Dragomir Stoynev has sent mixed signals about whether the government will try to keep the arms factory state property or re-attempt privatization after a number of unsuccessful procedures.