KTM has to pay its creditors 548 million Euros (approx Rs 5,000 crore) by May 23, less than 90 days from now.
KTM’s financial troubles are perhaps the most talked-about event in today’s motorcycle industry now parent company Pierer Mobility AG, has shared an update. On Feb 25, the company was given approval for its proposed restructuring plans whereby the company will pay off 30 percent of its total debt back to its creditors of which there are around 2,500. This amounts to 548 million Euros and the company has been given a rather short deadline of May 23, 2025.
- KTM will pay off 30 percent of its debt as a one-time payment
- Production to resume by mid-March
- Investors will pump 50 million EUR to resume production
KTM AG, a wholly owned subsidiary of Pierer Mobility AG, had to apply for court restructuring proceedings with self-administration in November 2024. The aim of these proceedings was to agree on a restructuring plan with the creditors within 90 days, for which the deadline was February 25.
At the meeting regarding the restructuring plan, the creditors accepted the plan submitted by KTM. This plan provides for creditors to receive 30 percent of their claims in the form of a one-time payment totalling 548 million Euros and the remaining 70 percent has been forgiven. This amount must be submitted to the restructuring administrator by May 23, 2025.
We recently reported that Bajaj has received approval from its board to invest 150 million euros (around Rs 1350cr) into the company via its subsidiary in the Netherlands. However that still leaves a massive chunk nearly 400 million left to be raised in less than the next 90 days. As of now, KTM hasn’t revealed where this is going to be coming from.
The internet is swirling with rumours of who the other investors could be, with BMW being one of the big names in the reckoning. However, this remains pure speculation at the moment.
After the May 23rd date, the court will then confirm the restructuring plan at the beginning of June and the restructuring proceedings of KTM AG will end once it becomes legally binding. The Pierer Mobility statement also says that KTM will be provided with financial resources totaling EUR 50 million from its extended circle of shareholders to enable production to be ramped up again.
This will begin gradually from mid-March 2025 with the planned full capacity utilisation of the four production lines in single-shift operation to be achieved within three months. Currently, KTM Europe has been on a manufacturing freeze, with no bikes having been made since the beginning of January.
All of this still leaves us with burning questions like what happens to the unsold KTM bikes around the world, of which there are said to be over 1 lakh units? Another burning question is what happens to KTM’s enormous motorsport operation, which consists of MotoGP, Motocross, Rally racing and more. The road ahead is uncertain but the coming months should give us some answers, and it appears that KTM is staring at the face of great change.
Also See: KTM financial crisis hasn’t impacted Indian operations
