[AMCN] Bajaj Set to Take Control of KTM with €800 Million Bailout

Indian motorcycle giant poised to become majority stakeholder in KTM following major cash injection and Austrian court approvals

The ongoing saga of KTM’s insolvency appears to be drawing to a close with an €800 million ($1.4 billion AUD) injection of cash from its Indian partner brand Bajaj – but if regulators approve the deal, it will see Bajaj also taking control of the company and its subsidiaries Husqvarna and GasGas.

KTM AG and two subsidiaries filed for ‘self-administration’ back in November last year when a combination of overproduction and slowing sales left it with a cash flow problem that prevented the company from meeting its debt obligations. Under Austrian law, the self-administration process gave protection from creditors for 90 days while the existing management stayed in place, requiring them to come up with a restructuring plan that would be approved by creditors. That plan, approved on 25th February 2025, set out terms that would see the company’s creditors paid a 30% quota of the money owed to them – a figure amounting to around €600 million ($1 billion AUD) – with the money required to be deposited with the insolvency court by 23rd May. That kicked off a search for investors, with a number of suitors rumoured including KTM’s existing partner brands CFMOTO in China and Bajaj in India, as well as more outlandish possibilities like BMW, but when CFMOTO and KTM surprisingly ended their shared distribution agreement in Europe a few weeks ago, it became increasingly clear that Bajaj – India’s second largest motorcycle maker and the third largest in the world – was hot favourite to take control.

The situation crystallised further on 16th May, when Bajaj’s European arm – Bajaj Auto International Holdings BV (BAIHBV), established in the Netherlands – took out a €566 million unsecured loan JP Morgan Chase, DBS Bank and Citigroup Global Markets Asia. On 19th May, Bajaj confirmed it was in negotiations with KTM, and on 21st May the Indian company announced its intention to take control of KTM, provided the deal is approved by Austrian authorities. In that announcement, Bajaj revealed it has already provided €200 million in four tranches of €50 million during the 2024 and early 2025 financial years to help keep the company afloat, and that it is now adding €600 million to the pot to clear its debts. Initially, the money will be held by the Austrian court overseeing the process, but it’s expected to be released to creditors in mid-June.

At the moment, BAIHBV – which is wholly owned by Bajaj Auto Limited in India – holds a 49.9% stake in an Austrian company, Pierer Bajaj AG, with the remaining 51.1% owned by longtime KTM boss Stefan Pierer. Pierer Bajaj AG, in turn, owns around 75% stake in Pierer Mobility AG, which in turn is the holding company of KTM AG, which also owns Husqvarna and GasGas. That means Bajaj effectively owns about 37.5% of KTM. Its new injection of money, if converted into a shareholding, will give Bajaj majority control of Pierer Mobility AG, KTM and its subsidiaries.

Gottfried Neumeister and Stefan Pierer

The new €600 million is initially being provided in the form of a €450 million secured term loan from BAIHBV to KTM AG, along with €150 million of convertible bonds issued by Pierer Bajaj AG and subscribed to by BAIHBV, which will be loaned to Pierer Mobility AG to help repay creditors and cover restart costs for KTM. Once approvals are given by the Austrian Takeover Commission, Foreign Investment Control and Merger Control Authorities, the loans are expected to be converted into a controlling shareholding for Bajaj.

Once approvals are received, Bajaj will initiate ‘a revamp of the governance framework including reconstituting the Board’ and work on making the ties between KTM and Bajaj closer. At the moment, Bajaj manufactures several KTM models including the single-cylinder street bike range.

Intriguingly, Bajaj also says it will be “exploring potential partnerships and collaborations to build sustainable competitive advantage and long-term value creation.” Bajaj is already at the centre of a complex web of motorcycle makers, because as well as assisting with the R&D and manufacture of some KTM models, it does the same with Triumph under a separate deal, manufacturing the Speed 400 and Scrambler 400 X on behalf of the British brand.

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In response to the Bajaj cash injection, KTM’s CEO Gottfried Neumeister – who replaced Stefan Pierer during the company’s insolvency – said: “Today we have been given the opportunity to continue the history of KTM. Together with our long-standing partner Bajaj, we were able to work out a strategy that will enable us to raise a further 600 million euros for our new start in addition to the 200 million euros already made available. The existing sites – in particular our main plant in Mattighofen/Munderfing – will remain the basis for our future success. This means that we will continue to be an important employer for the entire region. In view of this new, second opportunity, we at KTM feel deep gratitude and humility towards all those within and outside our group of companies who have made it possible. I would also like to take this opportunity to thank Stefan Pierer on behalf of all those who have accompanied us along the way. He laid the foundation for one of the world’s best-known motorcycle brands, which has a unique community.”

As for Pierer himself, he stayed on as co-CEO Pierer Mobility during the proceedings, but from June 2025, when the court confirms the completion of the restructuring, he will step down from Pierer Mobility executive board.

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