One of Russia’s largest drone manufacturers, AO Kronstadt, is on the verge of bankruptcy after months of financial turmoil and mounting lawsuits, Russian media reported.
According to CNews, the company has faced dozens of debt claims in recent months, with more than 600 million rubles ($7 million) sought since the beginning of summer. The largest cases involve lawsuits from LLC Innovative Technologies and Materials for 151.1 million rubles and AO Research Institute of Modern Telecommunications Technologies for 220.6 million rubles.
By May, total claims against the company had already reached one billion rubles, highlighting the growing financial pressure on the manufacturer of the “Orion” and “Inokhodets” drones—systems often compared to the American MQ-9 Reaper.
Industry sources told CNews that Kronstadt has been in difficulty for two years, with the problems traced to the 2022 exit of its key shareholder, AFK Sistema. Without that support, debt levels escalated rapidly.
Sanctions imposed by the United States and the European Union have further strained the company, cutting access to critical foreign-made components and inflating costs. At the same time, large state contracts placed heavy production demands on Kronstadt at a moment when supply chains were already under stress.
Nikolai Ryashin, general director of Rusdronport, suggested the company is headed toward collapse.
“The company will go the way of bankruptcy, so subcontractors are now rushing to file claims and get closer to the front of the line,” Ryashin said.
The report noted that Ukrainian strikes on Kronstadt’s production facilities added to the difficulties. The company, known for supplying drones widely used in Russia’s war against Ukraine, has seen its manufacturing plants targeted by Ukrainian forces. The combination of sanctions, battlefield strikes, and debt obligations has put the enterprise in what observers describe as its most precarious position since its founding.
The case is emblematic of broader challenges facing Russia’s defense-industrial base under wartime pressure. The Kremlin has leaned heavily on unmanned systems to sustain its operations in Ukraine, and Kronstadt was central to that strategy. Its “Orion” and “Inokhodets” drones were intended to provide long-endurance surveillance and strike capabilities, giving Russia a domestic alternative to Western armed UAVs.
Despite heavy government investment, the challenges appear insurmountable. Sanctions cut off key technologies, subcontractors are pushing claims in court, and financial liabilities have grown past the point of sustainability. Whether the company can be restructured or absorbed into another defense conglomerate remains uncertain, but for now Kronstadt is facing what many in the industry describe as an inevitable path toward bankruptcy.