IZHEVSK. Feb 19 (Interfax) - The future Kalashnikov Concern might be formed by merging five enterprises controlled by state corporation Rostec on the basis of OJSC NPO Izhmash, which is wholly owned by Rostec, a source familiar with this option for creating the group told Interfax.
"This plan was proposed by NPO Izhmash," he said.
He said the plan for forming the group calls for initially increasing NPO Izhmash's charter capital from 100,000 rubles to 1.3 billion rubles with a new share issue that Rostec would pay for with shares in Izhevsk-based OJSC NITI Progress (RTS: PRGR) and OJSC KBAL im. L.N. Koshkina, a design bureau in Moscow Region. According to the latest quarterly report, Rostec owns 50.67% of common shares in the Progress technology research institute and 80% of common shares in KBAL.
The second phase calls for merging OJSC Izhevsk Mechanical Plant (IMZ), which is wholly owned by the Federal Property Agency, into NPO Izhmash. This would require IMZ, which now has charter capital of 6.288 billion rubles, to be handed over to Rostec.
Upon completion of this restructuring, NPO Izhmash would be renamed OJSC Kalashnikov Concern.
This plan also calls for the Vyatsko-Polyansky Machine Building Plant Molot (RTS: VPMM), which is now in bankruptcy proceedings and under observation, to be folded into the group. Rostec owns 51% of common shares in Molot, and OJSC Izhmash Concern, which has been declared bankrupt, owns 41.76%.
The plan calls for the purchase of Molot shares at auction as part of receivership proceedings at Izhmash Concern. Rostec's stake in Molot would be used to pay for additional shares in Kalashnikov.
NPO Izhmash's press service declined to comment on this option for forming the Kalashnikov group.
The Interfax source said that celebrations to mark the creation of Kalashnikov Concern could be held on September 19 as part of Gunsmith Day.
The idea to form the Kalashnikov firearms group by merging the two defense industry plants NPO Izhmash and IMZ was proposed by Deputy Prime Minister Dmitry Rogozin in November 2012.
In early February, reports citing Rogozin said the future Kalashnikov group might also include the Molot plant.
"After the completion of these procedures, integration is possible with a number of Tula enterprises," Rogozin said.