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Russia’s Top Drone Maker Faces Collapse After Ukrainian Strikes and Crushing Debts
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One of Russia’s top drone manufacturers, AO Kronstadt, is teetering on the brink of bankruptcy after months of mounting debts, battlefield setbacks, and Ukrainian drone strikes on its production facilities, defense media outlet Defense Blog reported on August 25.
The company has faced a flood of lawsuits from creditors since the summer, with more than 600 million rubles (roughly $7 million) in claims filed in recent months.
⚡🇷🇺🇺🇦⚠️ Ukrainian drones attacked this morning the Kronstadt plant in Dubna.
— Spicy Sonal (@ichkipichki) May 28, 2025
The factory is specialized in the design and production of large UAV.
The plant is located north of Moscow, 550km from Ukraine.
56°45'34"N 37°06'34"E pic.twitter.com/tXJ7z1TTKO
Major cases include suits from LLC Innovative Technologies and Materials, demanding 151.1 million rubles, and AO Research Institute of Modern Telecommunications Technologies, seeking 220.6 million rubles. By May, the company’s total liabilities had already topped one billion rubles.
Kronstadt is best known for producing the “Orion” and “Inokhodets” drones—often described as Russia’s attempt to build a domestic counterpart to the American MQ-9 Reaper.
According to Defense Blog, industry insiders stated that Kronstadt’s financial woes date back two years, when major shareholder AFK Sistema pulled out.
Without that support, the company’s debt ballooned. Sanctions from the US and EU cut off access to critical Western components, while Moscow piled on heavy state contracts that proved difficult to fulfill under strained supply chains.
“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,” said Nikolai Ryashin, general director of Rusdronport.
Kronstadt’s troubles have been compounded by repeated Ukrainian drone strikes on its production sites, including a major attack this summer on the Dubna Machine-Building Plant near Moscow.
Video footage circulating online showed explosions and gunfire as Russian troops tried to shoot down incoming drones. Locals could be heard saying, “That’s the third one,” as multiple strikes hit the facility.
Ukraine’s Center for Countering Disinformation confirmed the attack, describing the plant as “one of the key components of the Russian defense industry” and noting that it has been producing Orion combat drones at scale since 2020.
The Russian Defense Ministry claimed to have intercepted 155 Ukrainian drones in one night alone across 13 regions, including 11 over Moscow and several near the Kronstadt facility. However, independent reports and videos suggest that at least some drones reached their target.
For the Kremlin, Kronstadt’s decline poses a serious challenge. Unmanned systems have been central to Russia’s war strategy in Ukraine, and the Orion was supposed to be a flagship program. Now, the company is battered by sanctions, litigation, and battlefield strikes—leaving its future in doubt.
Earlier, an explosion at the “Elastic” gunpowder military factory in Russia’s Ryazan region resulted in the deaths of at least four Russian soldiers, with some reports indicating as many as five fatalities. The explosion occurred in one of the factory’s production areas, followed by a fire.
