It's done. According to RIAN (23 Oct 2009), RAC MiG has been acquired by the UAC, taking 100% of shares.
As you may know, RAC MiG had accumulated a debt of $1.25 billion. In part, it suffered tremendously over the cancelled $1.3 billion Algerian MiG-29SMT/UBT deal for 34 a/c. The Russian Air Force finally bought the 15 returned aircraft and a further 9, but that didn't get it out of trouble and a UAC take-over was in the works already, with both companies being owned by the state. Actually one might say that RAC MiG was failing alrdy and the Algerian deal was the last thing that could save them. Realistically, the deal wasn't big enough to solve the financial problems anyway.
Now about the Algerian thing, the aircraft were not accepted because of inferior equipment. Of course MiG was blamed and officials quickly spoke up to defend MiG/Rosoboronexport, saying that there were no quality issues and that it was about politics... Algeria just wanted to cancel the order and go for Western planes. An idea which soon proved false, when the country did order Su-30MKA, Yak-130s produced by IAPO.
Investigators found that indeed there were low-quality parts in the MiGs and the equipment supplier, Aviaremsnab, was to blame for supplying old 1982-1996 produced equipment, selling it as new using forged certificates and tags under the $14.3 million contract. Musail Ismailov, chief of the Aviaremsnab company, and his deputy Alexander Kutumov are currently in jail for the fraud already, but in September a further case was opened against the company and top management.
There's also some good news. MiG aircraft are now getting interest from the state again as part of the government's measures to create jobs in defence/aerospace sectors to help it survive the recession. Surely, as part of the state UAC umbrella corporation now, MiG can also benefit. Russia's Navy is set to buy at least 24 MiG-29K fighters to be deployed on the Admiral Kuznetsov aircraft carrier, replacing the Su-33.
Although the Su-33 is a much heavier jet with the performance envelop to match, it has outdated avionics, and thus limited compatibility with Russia's new line of both air-to-air missiles, but more importantly precision guided munitions. I am not convinced this will actually mean retirement of the Su-33, they are likely to join the Russian Navy's land based air regiments, as their service life won't expire until 2025. Furthermore, I am not sure if the MiG-29K can carry the massive Moskit, or Brahmos.
The estimated $1 billion deal will be for the new MiG-29K design, thus not be confused with the 1990s MiG-29K. It will be similar to India's MiG-29K, but probably with local IFF and radio/com sets. Clearly from a logistic/production point of view, a much more economical option than new Su-33s, or upgrading the existing fleet, which won't reduce operating costs.
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