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Kalashnikov Switches to Private Hands in $41Mn Deal
RT ^

Posted on 10/07/2013 6:48:21 PM PDT by nickcarraway

Russia’s largest weapons producer has struggled to be profitable in the post-Cold War years, and now 49 percent of the Kalashnikov Group will be sold to private buyers for nearly $41 million.

Despite three years of trying to overcome Kalashnikov's debts, state shareholder Rostec will sell its 49 percent stake to private investors, Vedomosti newspaper reports. The reported buyers are two businessmen affiliated with the Russian operator of airport link Aeroexpress, Alexey Krivoruchko, and part owner Andrey Bokarev.

Bokarev is also the co-owner of TransMashHolding, a rail and transport company, as well as Kuzbassrazrezugol, a coal company, and Moscow Metro Department.

It was conditional the investors be Russian nationals, and the two men have already pledged to invest an additional $78 million over the next two years to pay off debt of the AK-47 producer, which makes up 95 percent of Russia's light weapons.

Bokarev picked up the shares because he has a "financial incentive" and Krivoruchko sees the investment paying for itself in five years. The two will lead the creation of future joint ventures with foreign partners in producing gunpowder and ammunition.

AK-109 Kalashnikov assault rifle. (RIA Novosti / Vladimir Vyatkin)AK-109 Kalashnikov assault rifle. (RIA Novosti / Vladimir Vyatkin)

The deal was approved by President Vladimir Putin as well as the Ministry of Industry after meeting with Sergey Chemozov, CEO of Rostec.

The public-private partnership is “the most effective model to reform the industry,” according to Chemozov, as reported by Vedomosti. The turn to private investors is part of Kalashnikov’s overall strategy through 2020, developed jointly by Rostec and the Ministry of Industry and Trade

Production output sharply decreased after the end of World War II, and again after the Soviet Union collapsed, and has struggled on the modern market.

The Kalashnikov Group was established in August 2013, after the Izhevsk plant (Izhmash), a former producer of the iconic AK-47 assault rifle was declared bankrupt a year earlier. The Kalashnikov Group was formed in a merger between Izhmash and Izhevsk Mechanical Plant.

The Kalashnikov Group currently operates in Tula, south of Moscow, and Izhevsk, located in the Urals, home of the original designer Mikhail Kalashnikov. Production could triple and reach 1.9 million units per year, and has the potential to boost sales revenue to more than $750 million.

Mikhail Kalashnikov, the designer of the world’s iconic firearm transferred the brand rights to the newly formed weapons venture. The brand is estimated to be worth $10 billion.

Kalashnikov, 93, was a tank commander in World War II, and developed the AK-47 to counter German assault weapons.


TOPICS: Business/Economy; Extended News; Foreign Affairs; Russia
KEYWORDS: banglist

1 posted on 10/07/2013 6:48:21 PM PDT by nickcarraway
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To: nickcarraway
Did the old guy finally make some money off the deal?

/johnny

2 posted on 10/07/2013 6:55:57 PM PDT by JRandomFreeper (Gone Galt)
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To: nickcarraway

So are we going to have AK Big Box stores here in the US soon?


3 posted on 10/07/2013 6:56:39 PM PDT by Paladin2
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To: Paladin2

That would be awesome...and cause a lot of liberals to pee their pants...


4 posted on 10/07/2013 6:59:32 PM PDT by nascarnation (Frequently wrong but rarely in doubt....)
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To: nascarnation

I suspect that Soviet Ammo could be of sufficient quality to be more than useful in these days of tribulation.


5 posted on 10/07/2013 7:02:02 PM PDT by Paladin2
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To: Paladin2

If they offer franchises, I’m gonna get one.

Maybe Putin will come for the grand opening?


6 posted on 10/07/2013 7:03:37 PM PDT by nascarnation (Frequently wrong but rarely in doubt....)
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To: nickcarraway

Kalashnikov was the head of the design team that AFTER THE WAR designed the AK-47.

Of course another member of the design team at Izmash was the German Hugo Schmeisser.

By August 1945, the Red Army had created 50 StG44s from existing assembly parts, and had begun inspecting their design. 10,785 sheets of technical designs were confiscated by the Soviets as part of their research. In October 1945, Schmeisser was forced to work for the Red Army and instructed to continue development of new weapons.

Schmeisser’s brilliance continued to impress the Red Army, and he, along with other weapons designers and their families, was relocated to the USSR. On 24 October 1946 the German specialists rode a train to Izhevsk in the southern Ural Mountains, where a center of Russian firearms development was located.

Schmeisser was one of 16 Germans for which a special department (no. 58) was created at factory number 74, later known as Izmash. Schmeisser was appointed as one of the five designers of the group, together with Kurt Horn and Werner Gruner (both from Grossfuss) and Oscar Schink (from Gustloff), under the formal leadership of Karl Barnitske (also from Gustloff). There is some evidence that Schmeisser was uncooperative with the Soviets because he received the most negative review by his Soviet handlers in this group of five German designers. In these Soviet reviews, Schmeisser was described as a “practical man”, who invoked his lack of formal training whenever he was presented with any design problems. Initially Schmeisser was given a salary of 5,000 rubles per month, but this was cut after two just months to 3,500 rubles, and a month later to 2,500 rubles. These official Soviet reports match the memoirs of Yevgeny Dragunov, who described Schmeisser as afflicted by chronic lung disease and not engaging in much activity, unlike Gruner, whom Dragunov described as brilliant man, who had contributed considerably.

Schmeisser worked in Izhevsk until 1952 when he and other German specialists returned home to Germany. With short notice, his stay in the Soviet Union was extended beyond that of the other weapon specialists by a half year. He finally returned home on 9 June 1952. Schmeisser died on 12 September 1953, and was buried in Suhl.

Per Wikipedia.


7 posted on 10/07/2013 7:04:07 PM PDT by donmeaker (The lessons of Weimar are soon to be relearned.)
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To: nascarnation

He could approach and enter the store on a COSSACK Steed with an 0bama Dummy riding behind him - like the pic.


8 posted on 10/07/2013 7:06:11 PM PDT by Paladin2
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To: Paladin2
We'll hand out t-shirts to all the kids


9 posted on 10/07/2013 7:07:49 PM PDT by nascarnation (Frequently wrong but rarely in doubt....)
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To: nascarnation

I so stole that graphic...


10 posted on 10/07/2013 7:08:42 PM PDT by Paladin2
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To: Paladin2
This is their actual logo now, would look awesome huge on a storefront


11 posted on 10/07/2013 7:09:29 PM PDT by nascarnation (Frequently wrong but rarely in doubt....)
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To: Paladin2
Putin on a bear photo: Putin on a bear Putin-on-a-bear_zps38723422.jpg
12 posted on 10/07/2013 7:12:09 PM PDT by tumblindice (America's founding fathers: All armed conservatives.)
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To: Paladin2
So are we going to have AK Big Box stores here in the US soon? Kalashnikovs "я" Us? ;)
13 posted on 10/07/2013 7:12:42 PM PDT by Frank_2001
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To: nickcarraway

“Vyatskie Polyany Machine-Building Plant MOLOT” builds AKs and Is already a joint stock company.

The Sestroyetsk Arsenal burned to the ground in the 1920’s


14 posted on 10/07/2013 7:15:07 PM PDT by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: Paladin2

Hopefully we will have cheap ammo.


15 posted on 10/07/2013 7:15:56 PM PDT by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: Frank_2001

They could sell single share certificates for $10, good for a wall hanging.
I’d buy one.


16 posted on 10/07/2013 7:16:20 PM PDT by Eric in the Ozarks ("Say Not the Struggle Naught Availeth.")
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To: tumblindice

Those are not the mama bear and cubs I’ve met.


17 posted on 10/07/2013 7:16:50 PM PDT by Paladin2
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To: Frank_2001
LOL.

(Great idea!)

18 posted on 10/07/2013 7:18:40 PM PDT by Paladin2
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To: Frank_2001

Thinking “out of the box”.


19 posted on 10/07/2013 7:19:36 PM PDT by Paladin2
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To: Frank_2001

Thinking “outside of the box”.


20 posted on 10/07/2013 7:19:59 PM PDT by Paladin2
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To: JRandomFreeper

General Mikhail Kalashnikov never saw nor will he ever see one kopeck’s worth of royalties from his design.

Heck, a few years ago there were full page ads in the American Rifleman for “Kalashnikov Vodka”.

Too bad, comrade.


21 posted on 10/07/2013 7:27:58 PM PDT by elcid1970 ("In the modern world, Muslims are living fossils.")
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To: elcid1970

I’m confused. With the international weapons ban in place, who are they going to sell these weapons to?


22 posted on 10/07/2013 7:33:44 PM PDT by EQAndyBuzz (Make today a great day. Insult a liberal.)
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To: JRandomFreeper
Did the old guy finally make some money off the deal?

Eugene Stoner (M-16) and Kalashnikov studied each others designs and incorporated concepts they liked into their respective weapon systems. Stoner more so than Kalashnikov. They became friends after meeting at European weapon shows. Kalashnikov would joke about all the money Stoner made with his weapon systems and how little he made, living in a modest home outside Moscow. In fact as time went on Stoner would sponsor Kalashnikov's attendance at weapon conventions in Europe. Stoner died of cancer in 1997.
Perhaps Kalashnikov, in his advanced years, will finally see significant monetary gain from his weapon system.

23 posted on 10/07/2013 7:38:27 PM PDT by BluH2o
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To: nascarnation

A bunch of years ago I had just gotten back from shooting in a local avacado field with my buds to an apartment I was renting when I saw a cable guy good old boy disconnecting somebody.

I asked him who he was disconnecting, and he basically said none of my business.

Ok with that, I popped my trunk and pulled out my Norinco with the milled stock and a case of beer and walked on by.

He was whiter than Michael Jackson


24 posted on 10/07/2013 7:42:31 PM PDT by Rome2000 (THE WASHINGTONIANS AND UNIVERSAL SUFFRAGE ARE THE ENEMY -ROTATE THE CAPITAL AMONGST THE STATES)
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To: Paladin2

One thing to be said for current production Russian ammo, it runs well through Combloc guns that were designed for it. There are two major manufacturers imported here. Wolf brand made at Tula Cartridge Plant[Russia]. Brown/Silver/Golden Bear made by Barnaul Machine Plant [Russia]. All ammunition is steel cased, noncorrosive, and Berdan primed. Wolf ammo is polymer coated. Brown Bear is brown lacquer coated. Silver Bear wears a zinc wash. Golden Bear wears a brass wash. U.S. manufacture self-loading pistols and rifles may or may not like the steel cased ammunition. It is best to try samples to see if your firearm will function reliably with steel cased ammunition.


25 posted on 10/07/2013 7:45:58 PM PDT by MasterGunner01
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To: Frank_2001
Kalashnikovs "я" Us

Brilliant post!

26 posted on 10/07/2013 7:55:28 PM PDT by EternalVigilance
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To: Paladin2
I suspect that Soviet Ammo could be of sufficient quality to be more than useful in these days of tribulation.

I especially appreciate the irony of that situation. Sell us the rope to hang you with indeed.

27 posted on 10/07/2013 8:24:19 PM PDT by EricT. (Freedom is slavery. Ignorance is strength. Big brother is watching you.)
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To: MasterGunner01
I think I have some WOLF 22lr.

I'll have to run a box through some "borrowed" firearms to chech it out again.

28 posted on 10/07/2013 8:27:26 PM PDT by Paladin2
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To: Paladin2
Now that I think about it, I may inscribe my commie rifle with this followed by a smiley face:

Капиталисты продадут нам веревку, на которой мы повесим их. -Владимир Ленин

(The Capitalists will sell us the rope with which we will hang them. - Vladimir Lenin)

29 posted on 10/07/2013 8:34:43 PM PDT by EricT. (Freedom is slavery. Ignorance is strength. Big brother is watching you.)
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To: nickcarraway
A couple of things here don't make sense:

Russia’s largest weapons producer has struggled to be profitable in the post-Cold War years, and now 49 percent of the Kalashnikov Group will be sold to private buyers for nearly $41 million.

Mikhail Kalashnikov, the designer of the world’s iconic firearm transferred the brand rights to the newly formed weapons venture. The brand is estimated to be worth $10 billion.

Now I realize the Kalashnikov firm is in debt, but there is no way 49% of it could be sold for a mere $41 million if the brand itself is worth $10 billion. The math just doesn't work. And for good reason. There are hundreds of thousands of unused mint condition AK-47/AK-47M/AK-74 rifles sitting in arms depots all around the world. Not to mention the million or more used variants still in use and available for sale. The family and similar variants are still manufactured in a dozen or more countries. No way is the AK-47 brand worth anywhere near $10 billion.

30 posted on 10/07/2013 8:45:08 PM PDT by panzer_grey
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To: Paladin2

I hope it serbs you well


31 posted on 10/07/2013 8:46:54 PM PDT by NonValueAdded (Occupy the DC Mall - take back the monuments)
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To: NonValueAdded
Well done...

Clap, clap, clap.

32 posted on 10/07/2013 8:49:19 PM PDT by Paladin2
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To: donmeaker

I believe that Kalashnikov designed the AK at Kovrov, not Izhevsk.


33 posted on 10/07/2013 9:08:07 PM PDT by Jacob Kell
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To: EQAndyBuzz

Anyone they want to sell them to, while they’re telling the UN to GFY. Why can’t we do the same?


34 posted on 10/07/2013 9:11:01 PM PDT by elcid1970 ("In the modern world, Muslims are living fossils.")
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To: nickcarraway

Does anyone know who owns the remaining 51%?


35 posted on 10/07/2013 9:21:05 PM PDT by Jacob Kell
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To: Jacob Kell
I think you are correct. An excellent source of information on the AK-47 and its development is the book "The Gun" by C.J. Chivers. It covers not only the development of the AK-47, but the development of machine guns and other automatic weapons including the M-16. It also covers the impact of automatic weapons (especially the AK-47 and its variants) on conventional and guerrilla warfare. It makes a great birthday or Christmas gift

http://www.amazon.com/The-Gun-C-J-Chivers/dp/0743270762/ref=sr_1_1?ie=UTF8&qid=1381205920&sr=8-1&keywords=the+gun+chivers

36 posted on 10/07/2013 9:26:19 PM PDT by panzer_grey
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To: Jacob Kell
Does anyone know who owns the remaining 51%?

Rostec is the Russian state arms corporation, so essentially its the Russian government. In other words a semi-legal organized crime syndicate with Vladimir Putin as the godfather.

37 posted on 10/07/2013 9:36:24 PM PDT by panzer_grey
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To: nickcarraway

They didn't try Shark Tank?

38 posted on 10/07/2013 9:57:28 PM PDT by 2ndDivisionVet (You can't invade the mainland US There'd be a rifle behind every blade of grass.)
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To: panzer_grey

Yeah, unlike our Boy Scout-like Goo-goo (good government) masters, such as Valerie Jarrett, Barack Obama, Rahm Emanuel, Jerry Brown, John McCain and the rest.


39 posted on 10/07/2013 10:03:27 PM PDT by 2ndDivisionVet (You can't invade the mainland US There'd be a rifle behind every blade of grass.)
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To: elcid1970

I doubt he did get any money from the design. Ditto for John Garand. “For his work with the Springfield Armory, Garand was awarded the Meritorious Service Medal in 1941, and the first Medal for Merit (together with Albert Hoyt Taylor) on March 28, 1944. Garand never received any royalties from his design. A bill was introduced in Congress to award him $100,000 in appreciation, but did not pass. Garand remained in his consulting position until his retirement in 1953, and died in Springfield, Massachusetts in 1974.


40 posted on 10/07/2013 11:03:15 PM PDT by DesertRhino (I was standing with a rifle, waiting for soviet paratroopers, but communists just ran for office.)
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To: panzer_grey

So Rostec previously owned all of it?


41 posted on 10/08/2013 12:18:56 AM PDT by Jacob Kell
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To: elcid1970
Heck, a few years ago there were full page ads in the American Rifleman for “Kalashnikov Vodka”.

Actually, the vodka production is done by a company owned by the son-in-law and daughter of Kalishnikov. Simply marketing by using the name.

42 posted on 10/08/2013 1:01:22 AM PDT by TexasRedeye (Eschew Obfuscation)
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To: EQAndyBuzz

Lots of moon god cultists...?


43 posted on 10/08/2013 2:37:36 AM PDT by snuffy smiff (Socialism is the philosophy of failure, the creed of ignorance, and the gospel of envy.)
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To: Paladin2
The .22LR Wolf should not be a problem due to the small pressures involved. Steel cased centerfire ammo can be a problem for self-loaders with tighter SAMMI specification chambers. Military chambers are designed to more generous chamber because many military rifles and carbines are select fire and require looser dimensions to operate reliably as the barrel heats up from successive rounds. Russian designs incorporate very rugged extractors to positively extract steel cases. Civilian rifles’ and pistols’ extractors may not extract the steel empties reliably. To know for certain, you need to run at least 50 rounds through your pet firearm to see if it likes steel cases or not.
44 posted on 10/08/2013 1:04:26 PM PDT by MasterGunner01
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