KTM future analysed based on latest financial update

KTM will resume production by mid-March 2025, for which investors will invest an additional 50 million euros.

Published On Feb 27, 2025 12:43:00 PM

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KTM financial crisis update, payment to creditors, resumption of production

KTM’s financial troubles are perhaps the most talked-about event in today’s motorcycle industry, and its parent company, Pierer Mobility AG, has shared a further update now. On February 25, the company was given approval for its proposed restructuring plans, whereby it will pay off 30 percent of its total debt 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 in 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 1350 crore) into the company via its subsidiary in the Netherlands. However, that still leaves a massive chunk of 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 May 23, the court will confirm the restructuring plan at the beginning of June, and the restructuring proceedings of KTM AG will end once they become legally binding. The Pierer Mobility statement also says that KTM will be provided with financial resources totalling 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 made since the beginning of January.

All of this still leaves us with burning questions, such as what happens to the unsold KTM bikes around the world, of which there are said to be over 1 lakh units. Another 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