Indian Investors Secure the Future of KTM Motorcycle Brand

The iconic motorcycle manufacturer KTM has successfully avoided bankruptcy, thanks to financial backing from its Indian co-owner, Bajaj. The companies announced their financing commitments late Monday, ensuring the fulfillment of a 30% cash quota required during the ongoing insolvency proceedings.

According to the report, the Austrian company and its parent firm, Pierer Mobility, received pledges totaling approximately EUR600 million, which must be deposited with the appointed insolvency administrator, Peter Vogl, by May 23 to avert a complete collapse. Following this announcement, shares of Pierer Mobility surged by around 10%.

Gottfried Neumeister, CEO of Pierer Mobility, expressed his relief at the secured financing, highlighting it as a significant indicator of confidence in the company's future viability and brand strength. He noted this development as a crucial step toward stabilization and strategic renewal, benefiting employees, customers, dealers, partners, and suppliers alike.

It is widely understood that the financial support will predominantly come from Bajaj, which has been instrumental in providing funds since KTM filed for insolvency in November 2024. To date, Bajaj has contributed approximately EUR200 million to keep the company afloat and avoid insolvency. However, the European motorcycle industry leader still requires more than half a billion euros to meet creditor obligations fully. As a result, the company is actively seeking additional investors, with Bajaj's total investment potentially exceeding EUR750 million.

Reports indicate that Bajaj has secured a loan, which would facilitate timely payment of the required quota. Florian Beckermann from the Investors' Association expressed optimism, noting that the Indian conglomerate's financial solidity offers relief for shareholders, employees, and the local economy. He emphasized the importance of focusing on motorcycle production and sustainable profitability moving forward.

Despite this positive turn, uncertainties remain regarding the implications of the financial injection on the ownership structure. Speculation suggests that Bajaj may seek to enhance its stake in the company in exchange for its significant financial contributions. Currently, KTM is wholly owned by Pierer Mobility AG, which itself is 74.18% owned by Pierer Bajaj AG. The latter is primarily controlled by Stefan Pierer's Pierer Industrie AG and Bajaj Auto International Holdings B.V., which holds a 49.9% stake.

In November, KTM entered a self-administration restructuring process, facing claims from approximately 1,200 creditors amounting to around EUR2.2 billion. On February 25, creditors approved a restructuring plan that included a 30% cash quota. Currently, production in Upper Austria is halted due to supply chain disruptions resulting from the insolvency.