Sergei Bakeshin has commented to Mashnews on the attempt to put Russia’s only manufacturer of multiple artillery rocket system out of bankruptcy

Sergei Bakeshin - Counsel

Dmitry Makhonin, Governor of the Perm Region, announced that Motovilikhinskiye Zavody plant, Russia’s only manufacturer of multiple artillery rocket system, is coming out of a five-year bankruptcy procedure and becoming “a part of Rostec State Corporation. According to the Governor, this will make it possible to invest RUB 20 bn in the development of the plant. Motovilikhinskiye Zavody plant was declared insolvent in March 2018. In September 2023, the property complex of the plant was acquired by Remdiesel (a former subsidiary of KAMAZ, which is 49.9% owned by Rostec State Corporation) during an auction. It was the only bidder for the lot and got it for RUB 1.3 bn at the starting price of RUB 7.7 bn.

The sale of the property itself does not mean that the plant is out of bankruptcy, just that now the plant does not own the objects sold at the auction, explained Sergei Bakeshin, Counsel, d Head of Dispute Resolution and Insolvency practice at Maxima Legal, to Mashnews media. The expert suggested that when speaking about the bankruptcy exit, the Governor was referring to the property complex. It was indeed taken out of the bankruptcy process.

However, according to the plant’s bankruptcy creditor, Agency Taxes and Financial Law, the terms of the auction were unlawful. The Agency appealed to a court with a request to revise the bidding regulations approved at the creditors’ meeting on 28 July 2022. The Commercial Court of the Perm Region refused the creditor without finding a violation of the Civil Code of the Russian Federation. The plaintiff appealed the ruling, and the appeal hearing is scheduled for 5 October.

If the agency wins, new tenders will have to be announced, noted Sergei Bakeshin. In addition, within a month, the state may exercise its pre-emptive right to buy out the plant, which is a strategic enterprise, the expert added.

To read the full article (in Russian) please see Mashnews website>>>