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May 17, 2022

Gov’t to hold on to defense companies’ majority share packages

The government will no longer give up its majority share packages within defense companies and will keep at least half of their registered capital after privatization. At the same time, the government emphasized that the strategic investors that will be chosen will have to have high technology and know-how.

The government’s intention to secure at least half of the shares it holds within defense companies at the moment of their privatization is included in the new draft law that concerns the defense industry.

In the previous draft, published for public debate last spring, the state planned to hold only 20 per cent of the registered capital of defense companies at the moment of their privatization.

The change in strategy comes against the backdrop in which the government has decided to focus more on the defense sector, bearing in mind the recent military conflicts in the region.

The government will also elevate the conditions imposed on the investor in order for the defense company’s line of activity to be maintained, and will decide that the main line of activity and production or service capacities should be maintained unchanged for a minimum period of 5 years after privatization.

Changing the company’s main line of activity and/or the destination of its production and/or service capacities will be possible only with the approval of the Supreme Defense Council (CSAT).


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