Just a day before the critical May 23 deadline for KTM to repay €548 million (approximately ₹5,330 crore) to its creditors, Bajaj Auto has officially announced its intent to take over operations at the troubled Austrian motorcycle manufacturer. This move is expected to prevent KTM from entering insolvency, which would have been triggered had the payment not been made under Austrian law.
Background on KTM’s Debt and Restructuring
Earlier this year, KTM received court approval for a restructuring plan that required the company to repay 30% of its outstanding debt, amounting to €548 million, to over 2,500 creditors by May 23. Failure to meet this deadline would have pushed KTM into an irreversible insolvency process. Bajaj’s timely intervention appears to have rescued the brand, ensuring continuity for KTM and its iconic lineup of motorcycles.
Bajaj to Become Majority Stakeholder
While Bajaj Auto has been a key investor in KTM for years, this takeover marks a major shift in its role. The Indian two-wheeler giant will move from a minority position to majority ownership. The exact size of Bajaj’s new stake hasn’t been disclosed yet, but it is clear that the company is tightening its grip on the Austrian brand.
KTM’s ownership web is quite intricate. Bajaj Auto owns a Dutch subsidiary, Bajaj Auto International Holdings BV (BAIHBV), which in turn owns 49.9% of Pierer Bajaj AG (PBAG)—a joint venture with Pierer Industrie AG, controlled by Stefan Pierer. PBAG owns about 75% of Pierer Mobility AG (PMAG), the listed parent company of KTM AG, which also owns the Husqvarna and GASGAS brands. This structure gives Bajaj an effective indirect holding of around 37.5% in KTM through PMAG prior to the new arrangement.
Bajaj’s Financial Commitment to KTM’s Revival
To facilitate the takeover and rejuvenate KTM, Bajaj Auto has committed to a massive funding package totaling €800 million (around ₹7,700 crore). This capital injection aims to clear creditor dues and restart KTM’s operations and supply chain.
So far, €200 million (₹1,900 crore) has already been infused in four tranches via convertible bonds and loans. The remaining €600 million will be disbursed through a secured term loan (€450 million) and another €150 million via convertible bonds issued by PBAG and subscribed to by BAIHBV. These funds will ultimately be channeled to KTM AG through the existing ownership structure.
Additionally, Bajaj has stepped in to manage a separate creditor dispute involving Dabepo Holding GmbH. Bajaj has taken over Dabepo’s loan and share pledge commitments worth €80 million (₹770 crore), averting a foreclosure that could have derailed KTM’s restructuring.
Next Steps and Future Outlook
Bajaj’s immediate focus is to secure final approval from the Austrian courts, bringing KTM’s self-administration period to a close and formalizing the creditor settlement. Simultaneously, applications are being filed with regulatory bodies, including the Austrian Takeover Commission and various competition and foreign investment authorities.
Once approvals are in place, Bajaj will assume full operational control. Production of KTM motorcycles, along with the supply of spare parts and accessories, is expected to resume shortly.
While Bajaj’s intervention offers a lifeline, KTM still faces a challenging road to full recovery. Fans of the brand can breathe a sigh of relief for now, but major changes—possibly even to KTM’s identity and strategic direction—are likely in the months ahead.
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