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Private purchase of 49% in Kalashnikov Concern approved

February 26, 2014, 17:41 UTC+3 MOSCOW
1 pages in this article

MOSCOW, February 26. /ITAR-TASS/. Russian Federal Anti-Monopoly Service (FAS) has given the green light to the purchase of 49% of the Kalashnikov concern by private investors Alexei Krivoruchko and Andrei Bokarev, the service told Itar-Tass ahead of any official announcement.

The deal was previously reported to be signed in March after the regulator’s approval.

The concern now registers an additional stock issue worth 2.6 billion rubles ($72 million), half of it to be bought by the current director general Krivoruchko, who is also director general of Aeroexpress, and co-owner of Russia’s leading manufacturer of locomotives and railway equipment Transmashholding Bokarev.

This amount will be put into the concern’s capital immediately, while 1.2 billion rubles ($33 million) will be further invested over next two years. Accordingly, Krivoruchko’s and Bokarev’s contribution will total 2.5 billion rubles, or about $69.6 million. Rostec corporation that retains the controlling stake will invest in the holding’s development another 1.2 billion rubles.

Kalashnikov Concern is planning to achieve a positive rate of return over two years, which means it will have to double output. According to interim reports, last year the concern had a revenue of 2.2 billion rubles ($61 million) and a loss of 1.7 billion rubles ($47 million).

Kalashnikov Concern was registered last August on the basis of two weapon facilities in the city of Izhevsk: Izhmash and Izhevsk Mechanical Plant incorporated in Rostec (Rostekhnologii before December 2012). The concern will include equipment producer NITI Progress, Vyatsko-Polyansky Mechanical Engineering Plant Molot, cartridge design bureau named after Koshkin and maybe other facilities of rifle and ammunition industry.

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