Russian arms manufacturer Molot, maker of the VEPR line of rifles and shotguns, has gone bankrupt and will be auctioned off to the highest bidder.
When Barack Obama placed sanctions on Russian arms manufacturer in 2015, there was a mad scramble in the United States to buy as much of the sanctioned products as possible.
I personally bought at least 3 crates of surplus 7.62x54r ammunition and even splurged on a Saiga 12 shotgun.
When the executive order first came out, there was a lot of confusion over which Russian arms manufacturers were affected. For a time, people believed the import ban also applied to Molot, which produces the commercial VEPR rifles and shotguns. When it was revealed that Molot was exempt from the ban, sales of VEPRs started to slow down.
If the rifle or shotgun isn’t going to be banned, why rush to buy one?
Over the past year, we’ve seen VEPRs plummet in price. Once able to demand a $999 pricetag, I recently saw a VEPR 12 shotgun available at retail for under $650.
Today, we learned that Molot has gone belly up. The company will be auctioned for parts. It looks like the winning bidder will have to buy everything, which increases the likelihood of another manufacturer picking up the product lines.
Here’s the article from the Russian news site, Kommersant:
The sale by auction of one of the largest plants of the Kirov region – JSC “Vyatsko-Polyansky Machine-Building Plant” Molot “” (part of the state corporation “Rostec”) bankruptcy proceedings in respect of which was opened Kirov arbitration in October of 2013, officially announced the bankruptcy trustee Vitaly Shemigon now. According to published information, all property of “Hammer” is for sale in one lot. In this exhibition entered the whole production complex of “Hammer”: 91 buildings and structures, one plot of land owned and 11 leased sites (the area is not called), as well as objects of movable property – 12.89 thousand units of fixed assets (machinery and. equipment) and 30.75 thousand. units of inventory. In addition, in the same exhibition has become a 100% interest in the charter capital of LLC “Hammer-weapon” – a subsidiary factory, in which all the companies production has been allocated in the course of bankruptcy. Also included in the bankruptcy estate of intellectual property – patent rights in the 13 inventions, 11 utility models, 12 industrial designs and exclusive rights for 16 trademarks. In addition, as part of the lot – the right of claim to the LLC “Hammer-weapon” for supply contracts worth over 312 million rubles. The initial selling price of whole lot is 1.5 billion rubles, auction step -. 5% deposit – 20%.
The news comes on the heels of revelations that Colt Manufacturing has begun to lay off its Custom Shop workers. In addition, SilencerCo has started scaling back, laying off staff since consumers are no longer scrambling to purchase a suppressor.
This is the consequence of winning an election. Yes, our rights are protected. But the industry that built its business model on taking advantage of panic buying no longer has a boogeyman in the White House to drive sales.
Expect a reorganization of the industry with more heavyweight manufacturers either going out of business or scaling back significantly.