KTM’s planned restructure has been given the thumbs-up by its creditors today and although the brand is still seeking extra investment of EUR 800 million, it says bike production will ramp up again from next month.
Its creditors approved a restricting plan on today’s deadline, after KTM secured a EUR 50 million cash injection from shareholders. This is believed to include Chinese brand CF Moto and India’s Bajaj – although there are rumours BMW may have invested too.
A newspaper in India is claiming Bajaj has paid the whole EUR 50 million, but there is no confirmation on this.
Under the deal, creditors will receive 30% of the money they are owed. To do this, KTM must deposit around EUR 550 million by May 23. Its total debts are around EUR 2 billion.
KTM has already ousted Stefan Pierer as CEO and has cut production and jobs at its HQ in Austria and its subsidiaries around the world. It will move production of more bikes to Chine and India in a bid to cut costs.
The official info from parent group Pierer Mobility says:
Back on track – KTM AG reorganization plan accepted by creditors
Restructuring plan accepted: Cash quota of 30%, payable by May 23, 2025
Further fresh capital of around EUR 800 million required
Production will be ramped up again from mid-March 2025
KTM AG, a wholly owned subsidiary of PIERER Mobility AG, filed for court restructuring proceedings with self-administration on November 29, 2024. The aim of the proceedings was to agree a restructuring plan with the creditors within 90 days.
At today’s restructuring plan meeting, the creditors accepted the restructuring plan submitted by KTM AG. It provides for creditors to receive a cash quota of 30% of their claims. This cash quota is to be paid by KTM AG to the restructuring administrator by May 23, 2025.
Gottfried Neumeister, CEO of PIERER Mobility AG: “I am grateful and happy today. KTM is back on track. Our employees have done everything over the last three months to ensure that the race can continue. We have closed an important chapter today. But a single chapter never tells the whole story. Now we can continue the great story of KTM. We do it for the millions of KTM fans worldwide, to whom we are grateful every day. For our racers, of whom we are damn proud. And for our Austrian location, to which we are deeply attached in our hearts. KTM remains one of the top employers in the Upper Austrian industry.”
In order to finance the cash quota and further production, the Group requires fresh capital of around EUR 800 million. Citigroup Global Markets Europe AG (“Citigroup”) was commissioned to support this investment process in a structured, transparent and efficient manner in the interests of all stakeholders
To enable production to be ramped up again gradually from mid-March 2025, KTM AG will be provided with financial resources totaling EUR 50 million from the extended circle of shareholders. The planned full capacity utilization of the four production lines in single-shift operation is to be achieved within three months.