[AMCN] KTM Secures Billion Dollar Lifeline

Funding from major shareholder Bajaj Auto helps the Austrian motorcycle giant meet looming debt repayment deadline

In a crucial development, KTM AG has confirmed it has secured the funding required to fulfil its debt obligations as part of a sweeping insolvency plan. The Austrian company has battled a severe financial crisis since late last year that forced it into self-administration and a months-long restructuring process.

KTM has a huge inventory of unsold bikes

That process reached a decisive juncture this week when KTM confirmed that it had secured the necessary funding to make a critical payment to its creditors, putting it back on more stable financial footing. The required sum—around €600 million ($632 million)—is to cover 30% of the company’s outstanding debts, estimated to be more than €2 billion. The amount must be delivered to the insolvency administrator by the 23rd of May 2025, a deadline that KTM now says it will meet.

As reported by AMCN in April, major shareholder Bajaj Auto Ltd. is playing an instrumental role in securing KTM’s future. While KTM’s official statement remained discreet about naming names, regulatory filings in India show that Bajaj Auto’s European arm secured a €566 million unsecured loan from global financial heavyweights JP Morgan Chase & Co., DBS Bank Ltd., and Citigroup Inc. The funds, according to Bajaj’s statement to the Bombay Stock Exchange, were earmarked for investment purposes—though the filing does not explicitly name KTM as a beneficiary.

A return to production has been hampered a lack of component availability

Notwithstanding the coy language, there is little doubt about the loan’s intended destination. A statement from Pierer Mobility AG confirmed that “restructuring plans of KTM AG, KTM Components GmbH and KTM Forschungs & Entwicklungs GmbH can be fulfilled on time,” adding: “As announced, the creditors of KTM AG, KTM Components GmbH and KTM Forschungs & Entwicklungs GmbH approved a restructuring plan quota of 30 percent on February 25, 2025, payable by May 23, 2025. The total amount required to finance the quota under the three restructuring plans amounts to approx. EUR 600 million. Pierer Mobility AG and KTM AG have received financing commitments, subject to the execution of the requisite agreements, which will ensure that the quota payments… can be fulfilled on time by May 23, 2025.”

The successful securing of these funds follows a regional court decision in February that approved KTM’s restructuring proposal, which included a significant 70% haircut on its debts—a move that required creditor approval and underscored the urgency of securing new capital.

Pit Beirer says KTM is committed to factory racing efforts beyond 2025

Since initiating self-administration, KTM has undergone significant internal changes. These include layoffs, a temporary suspension of motorcycle production, the restructuring of its board of directors, and the sale of investments—including shares in MV Agusta.

KTM is owned by Pierer Mobility AG, which itself is 74.18% owned by Pierer Bajaj AG—a joint venture in which Bajaj Auto holds a 49.9% stake. While KTM has not confirmed Bajaj’s direct involvement in the loan, increased financial engagement may well see Bajaj taking on a more prominent role in the brand’s direction going forward.

In response to the news, KTM’s share value saw a noticeable uplift—a clear sign that investors are regaining confidence in the brand. However, questions remain, especially about KTM’s factory racing operations. During the height of its financial uncertainty late last year, court documentation revealed that one of the cost-saving proposals under consideration included a withdrawal from MotoGP. That said, KTM motorsport boss Pit Beirer moved quickly in January to reassure the racing world of the company’s continued commitment to competition, even hinting at preparations for the 2027 MotoGP rule changes.

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