Russian economic meltdown as key space company on brink of collapse

By John Varga, World News Reporter

Vladimir Putin visits RSC Energia (Image: Getty)

A Russian space company founded by the famous scientist Sergey Korolev is on the brink of collapse. RSC Energia is the parent company of Roscosmos - a state entity responsible for space flights and exploration.

Throughout its illustrious history, the company has been one of the main drivers of the Soviet and then Russian space industry. It has helped develop iconic Soviet space launch vehicles, including Vostok and the still flying Soyuz. However, the company has fallen on hard times and could now be wound up by administrators. The firm's CEO Igor Maltsev delivered the devastating news to employees in an email on the occasion of its 79th anniversary. He described the situation facing the company as "critical", as it struggles to service enormous debts.

Sergey Korolev was the father of Russia's space industry (Image: European Space Agency)

"The situation is critical: multimillion-dollar debts, interest on loans are eating up the budget, many processes are ineffective, a significant part of the team has lost motivation and a sense of shared responsibility," he wrote.

"The groundwork laid by Sergey Pavlovich [Korolev] and developed by our general designers – Mishin, Glushko, Semenov – has been exhausted by now."

Maltsev admitted that matters had not been helped by the company missing its deadline on "all major projects". He urged colleagues to face up to reality and to stop "lying to themselves and others".

The CEO said he could not rule out "closing the corporation", which is having difficulty in paying wages.

Financial data shows RSC Energia has accumulated 10.5 billion rubles (£96.9m) in net losses over the past 10 years.

The company’s total debt as of June 30, 2025, reached 168.4 billion rubles (£1.6bn) and has jumped by 17%, or 25 billion rubles (£230.7m), since the beginning of the year.

Sergey Korolev is considered the founding father of Russia's space industry and is the man responsible for the first human spaceflight.

He also helped develop the Soviet Union's intercontinental ballistic missile programme, after being released from a Stalin-era labour camp.