THE BRADLEY REPORT
Bajaj steps in to save KTM
By Ben Purvis
The full scale of KTM ' s woes came to light last November when the Austrian behemoth- Europe ' s largest bike maker- entered self-administration to get protection from its creditors while it hammered out a way to escape from its financial hole. Now the saga appears to be drawing to a close( maybe, hopefully) with an € 800m cash injection from the European arm of Indian bike maker Bajaj- a longtime KTM manufacturing partner and shareholder that will now become the company ' s majority owner if Austrian authorities give their stamp of approval. The money has reached KTM in stages, with an initial € 200m going from Bajaj to KTM in four € 50m tranches during the restructuring process, followed by an additional € 600m just ahead of the final deadline, 23rd May, to pay creditors the 30 % quota of the original debt, as agreed during the restructuring process, albeit reluctantly in many cases. Bajaj ' s European entity, Bajaj Auto International Holdings BV( BAIHBV), based in the Netherlands, has taken out its own unsecured one-year loan of € 566m from three banks, JP Morgan Chase, DBS Bank and Citigroup Global Markets Asia, to fund the KTM investment. Bajaj ' s huge size and value means repaying that sum shouldn ' t be difficult. Initially, the structure of KTM and its parent companies remains unchanged. BAIHBV owns a 49.9 % stake in Pierer Bajaj AG, which in turn holds 75 % of Pierer Mobility AG, the owner of KTM as well as brands including GasGas and Husqvarna. Essentially, that means Bajaj is a 37.5 % owner of KTM, but if regulators agree to the deal the € 800m debt-funding package will be converted to a larger shareholding, giving Bajaj a controlling stake in KTM and Pierer Bajaj AG. Bajaj already shares some R & D facilities with KTM and manufactures the Austrian brand ' s range of singlecylinder street bikes- the alliance has been in place since 2007 and the millionth Bajaj-made KTM rolled off the production lines in 2023. As India ' s second-largest motorcycle maker, behind only Hero MotoCorp, it has a market cap of around € 24bn. In an earnings call at the end of May, Bajaj Auto Executive Director Rakesh Sharma summarised KTM ' s plight, which saw it make a sudden U-turn from decades-long success story to near collapse, saying: " The unfortunate developments of 2024 onwards had their origins in the downturn of the e-
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bike business, and the sharp fall in demand for extreme sports during and post COVID. The failure to read the demand volatility led to increased unsold inventory, debt and interest
costs. The convergence of all these developments put a huge pressure on liquidity and brought KTM to near insolvency." He went on to say: " Once all the
Gottfried Neumeister has been confirmed to remain CEO until at least the end of August 2026.
regulated clearances are received, perhaps in late summer 2025, KTM and Bajaj will commence working very closely to execute a comprehensive turnaround plan." Bajaj ' s Chief Financial Officer, Dinesh Thapar, expanded on the company ' s plans for KTM- subject to that
"€ 800m loan from Indian partner will become a controlling stake in KTM ' s parent company if regulators give approval "
regulatory approval- explaining that the arrangement could see largerengined KTM ' s made in India and sharing their parts with Bajaj models in the future. He said: " We will also, at some point in time, look at expanding the remit of the joint development program as a possible opportunity. As of today that program only extends to bikes that are under 400 cc. But there is clearly an opportunity to be able to expand that all the way up to let ' s say, the 990 cc in the immediate term horizon." Pierer Mobility supervisory board chairman Stephan Zochling and deputy chairman Rajiv Bajaj, as well as board member Friedrich Roithner, resigned from the supervisory board at Pierer Mobility ' s AGM on 23 June. Bajaj CFO Dinesh Thapar was elected to the board, along with Ernst
Impact on MotoGP?
KTM ' s immediate position on the MotoGP grid isn ' t under threat, and per its present contract, the company has committed to remaining in the series through to the end of 2026- but at the moment there ' s no clarity on what will happen in 2027 and beyond. With 2027 bringing a radical shakeup to MotoGP regulations, including downsized 850cc engines instead of the current 1,000 cc fours, the banning of ride-height devices, the introduction of 100 % sustainable fuel, and new aerodynamic rules governing the shape and size of the bikes ' fairings, remaining in the series requires substantial investment. In short, completely new bikes need to be developed, and that ' s a substantial commitment for a company like KTM, given its financial position and the never-ending
THE BRADLEY REPORT
Timeline: 29 November 2024: KTM and two subsidiaries enter selfadministration, gaining 90 days protection from creditors while a restructuring plan is agreed. Production halts as KTM tries to clear backlog of unsold bikes. 25 February 2025: Creditors agree to the restructuring plan, which allows them to recoup only 30 % of the money owed, but requires that all the money is handed over to the insolvency court by 23 May. March 2025: KTM production restarts 28 April 2025: KTM production stops again due to shortage of parts from suppliers 16 May 2025: Bajaj Auto International Holdings BV takes out € 566m loan 19 May 2025: Bajaj confirms rumours of negotiations with KTM over a debt financing package 22 May 2025: Bajaj announces intention to take control of KTM, subject to regulatory approval, and debt financing is made available to the court so creditors can be paid, preventing KTM from being moved irrevocably into insolvency. 17 June 2025: Regional Court of Ried im Innkreis confirms restructuring plans for KTM AG, KTM Components GmbH, and KTM Forschungs & Entwicklungs GmbH. Administrators transfer agreed 30 % quota of debts to recognised creditors. 23 June 2025: Pierer Mobility AGM confirms 2024 accounts and changes to supervisory board. July 2025: KTM production scheduled to restart.
Chalupsky, chairman of the Pierer Bajaj AG board, and lawyer Ewald Oberhammer. Gottfried Neumeister has been confirmed to remain CEO until at least the end of August 2026, while Stefan Pierer retains his Co-CEO role until the end of 2025.
questions over whether the publicity of MotoGP justifies its cost. KTM satellite team, Tech 3, has already said it ' s working on a ' plan B ' should KTM pull out of the sport or decide not to field four bikes under the new rules, but remains hopeful that it will be able to continue to run KTMs in 2027 and beyond. In primary class terms, KTM may seek to transfer ownership of its grid slots to its Swiss-based racing subsidiary. It is reported that Dorna has received credible " name your price " interest for those slots, with BMW and, ironically, Suzuki said to be serious bidders.
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