Maker of AK-47 assault rifles goes bankrupt

ISTANBUL - Doğan News Agency

An estimated 100 million AK-type rifles have been sold around the world. AFP photo

Izhmash, the manufacturer of assault rifle AK-47, or Kalashnikov, officially went bankrupt over unpaid debts, according to the Russian Ria Rovosti news agency.

More than 100 million AK-type rifles are estimated to have been built since they were first introduced by inventor Mihail Kalashnikov in 1947.

Izhmash is a unit of the Russian Technologies Corporation, a state holding company with mining, arms and automotive assets.

A court has given the green light to Izmash factory being wound up, following a lawsuit issued by a creditor owed 814,000 rubles ($275,000). The Kalashnikov maker is now in receivership, and an administrator has been appointed by the court.

The bankruptcy is part of the re-organization procedure that was launched last year by Kalashnikov’s parent company, Russian Technologies State Corporation. Its director Maksim Kuzyuk said the bankruptcy procedure would help save the brand and most of the company’s property.

Izhmash, which has 5.3 billion ruble loan debts, registered 2.4 billion rubles of loss in 2011. Its production volume decreased by 45.5 percent last year. A major blow for Izmash came when the Russian Defence Ministry announced that it would not purchase the newly-created rifle the AK-12, which was unveiled in February.