Graham Stack in Kyiv -
Izhmash, producer of Russia's notorious Kalashnikov AK-47 assault rifle, has declared insolvency, according to Russian newswires. The plant, which designed and began production of the weapon in 1947, has fallen victim to a $30,000 claim by a creditor and is now in receivership.
It may be the world's most popular assault rifle, with an estimated 100m weapons in circulation, but the AK-47 is now outdated compared to Western equivalents. Even the Russian army is reported to be mulling alternatives for its next model, being reportedly unsatisfied with the new AK-12 model developed by Izhmash.
Unlicensed production of the iconic gun has also hit the weapons maker. The volume of illegal copies made across the world exceeds the Izhevsk plant's output by several times, preventing the Russian company from cashing in on the AK-47's global success. In 2012 the company made a net loss of over $80m, with production down 45%.
The bankruptcy process is largely formal in character, intended to integrate the plant with parent company Russian Technologies. Izmash's assets will be transferred to Research and Production Association Izhmash - a new subsidiary of the state holding - Maksim Kuzyuk, director of the new unit, told Skrin news.
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