IshAvto Files for Bankruptcy

Yesterday, OAO IshAvto (ОАО ИжАвто) became the first Russian carmaker to enter bankruptcy proceedings. Based in Ishevsk, the factory opened in 1965 and produced such famous (or notorious) cars such as the Moskvitsh 408.

Moskvitch-408

Moskvitch-408 Picture source: Wikipedia

IshAvto today manufactures Kias (e.g. the Rio, Sorento).

IshAvto did get in trouble earlier this year when falling demand let to production being halted and the dismissal of 5,000 workers. Talks between the Russian government and the President of Province of Umurtya (where Ishevsk is located in) did not lead to a ‘bailout’ of the troubled Automaker.

According to sources of the Russian newspaper Kommersant some unnamed banks refuesed to restructure the carmaker’s debt which amounted to 11,3bln rubles. [One of those is most likely Sberbank, the largest bank in Russia].

According to Kommersant the filing for bankruptcy may be a tactical measure to enhance the banks’ willingness to restructure the debt of the Automaker.

[Source: Kommersant, Russia]

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