KTM was placed into self-administration in November last year, which led to a temporary seizure of production amid reports it had racked up billions in debt.
Some of that debt will now be cleared, as Indian firm Bajaj Auto announced it would not only tip in €800 million ($1.406 billion) to clear some of the debt, but also become its majority stakeholder.
The company has been a minor stakeholder in KTM since 2007, most recently holding a 37.5 per cent share in the Austrian brand.
Of the €800 million debt clearing package, Bajaj Auto has already spent €200 million ($351.6 million, with the additional €600 million ($1.055 billion) to come imminently.
“With this action and post requisite approvals coming through, Bajaj will shift gears from hitherto being a dormant minority investor to a majority owner in the global KTM company, whilst it continues to accelerate the thriving KTM business that is run out of India under the joint development program, where it develops, makes and sells in India as well as exports to 80 countries across the KTM network.
“This twin move of taking ownership (subject to approvals) and paring down debt by providing liquidity at a crucial stage, positions Bajaj Auto as a driving force in shaping the future of one of world’s most admired high performance motorcycle companies.”
“The immediate next step is to secure binding restructuring orders from the Court in Austria to mark the end of the self-administration process and settle the creditors’ quota.
“Alongside, applications are being made to the Austrian Takeover Commission, Foreign Investment Control and Merger Control Authorities, as applicable for their approval. Till such time these are received, the current control setup shall standstill and prevail.
“Finally, after months of stoppage, the production of bikes and the supply of parts, garments and accessories to the markets will be started.
Throughout its self-administration and financial woes, KTM’s MotoGP team has continued to compete.
Discussion about this post