How KTM was rescued by the world’s third-largest motorcycle maker – and $900 million

WelcoBajaj Auto, the world’s third-largest motorcycle manufacturer, has gone from a partner of KTM to taking over the Austrian brand altogether. That’s thanks to a €800-million (US$905-million) shot in the arm from the Indian two-wheeler giant that will enable KTM to bring its production facilities roaring back to life.

The news was confirmed in a stock exchange filing in India by Bajaj, in which the company stated that it was transitioning to a majority owner in KTM through its wholly owned international subsidiary, BAIHBV, with a € 600 million (US$678.6 million) infusion. This followed €200 million (approximately US$226 million) in funds supplied earlier in the year.

This signals the end of a particularly rough patch for KTM, which had been on the brink of collapse for a while. We began to see the signs of trouble last November, when layoffs affected the company’s workforce in Austria and production was halted there. Overproduction and quality issues were the main culprits, spelling major problems for parent company Pierer Mobility AG, as KTM was its biggest earner.

The following month, bankruptcy seemed imminent as KTM entered self-administration to undergo restructuring. At the time, its massive liabilities were estimated to be more than €2.5 billion (US$2.64 billion).

During its 90-day self-administration procedure, it ultimately sold its controlling stake in the premium Italian bike brand MV Agusta in February. KTM subsequently reached a deal with creditors that month to implement a $ 576 million restructuring plan and stave off closure. Bajaj Auto loaned KTM €50 million (approximately US$52 million) at this point to kick-start production. The Austrian brand intended to ramp up four production lines to full capacity – but it still needed approximately €800 million (US$841 million) in new funding to support manufacturing and round out its cash reserves.

A few months later, here we are – KTM is fired up and ready to race again.

KTM is back, thanks to you. Now we look ahead! | KTM

The company will first introduce its latest, smaller-capacity models – including 125cc street and Enduro bikes, as well as 390cc adventure bikes – to dealerships worldwide.

Speaking about the future of KTM’s primary factory in Austria, CEO Gottfried Neumeister said, “The existing sites – in particular our main plant in Mattighofen/Munderfing – will remain the basis for our future success. This means that we will continue to be an important employer for the entire region.”

Fans will likely keep a close eye on the brand’s next chapter to see how it navigates uncertainty with a strong financial position and a second chance to succeed in a fiercely competitive market.

Source: KTM

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Abhimanyu Ghoshal

Abhimanyu has been a trusted voice in the science, technology, transportation, startup, and AI spaces for more than a decade at several global outlets, including three and a half years as the managing editor at TNW. He holds a Bachelor of Arts in Economics, Psychology and Sociology. When he’s not writing about breakthroughs in science and technology, he’s usually out motorcycling around South India. This is your first post. Edit or delete it, then start writing!