KTM Restructuring Plan Approved By Creditors; Seeks €800 Million Funding

KTM AG has announced that its creditors have accepted its restructuring plan. This announcement comes nearly three months after the company had announced that it had filed for self-administration to save the company from insolvency. In its latest statement, the company laid out its plans to organise funds and eventually escape bankruptcy. The Austrian two-wheeler group will arrange for its creditors to receive a cash quota of 30 per cent of their claims in the form of a one-off payment. 

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KTM will pay back 30 per cent of the funds it owes to creditors by May 2025

According to the statement, the company plans to fulfil the quota of 30 per cent by depositing an amount of EUR 548 million by May 23, 2025, with the restructuring administrator. Upon receiving the amount, the court will then confirm the restructuring plan at the beginning of June 2025, and end the restructuring process. However, the company also said in its statement that it seeks funding to the tune of EUR 800 million to help deposit the cash quota and restart production. The company stated that its “extended circle of shareholders” will endow it with funds of EUR 50 million, enabling it to restart production in mid-March. 

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Bajaj Auto recently approved investing funds of up to 150 million Euros for KTM

However, the big question still remains unanswered, as to which company will provide the KTM with the funding it requires. Many reports name Bajaj Auto, which already owns a 49.9 per cent stake in Pierer Bajaj AG (PBAG), as the company that will save KTM from its financial troubles. Bajaj Auto recently approved investing funds of up to 150 million Euros in its wholly-owned subsidiary, Bajaj Auto International Holdings BV, Netherlands (BAIH BV). For the unversed, BAIH BV is Bajaj’s holding company for its shares in KTM. The new investment is expected to help BAIH BV strengthen its stake in KTM.

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Sources in Bajaj Auto, however, have disclosed that the leadership at Bajaj Auto is not keen to take over management of KTM AG, despite the fresh investment, and KTM will continue to operate as an independent Austrian brand with its own management and personnel.