Motorcycle brand KTM is about to have a new owner in India’s Bajaj
Indian motorcycle brand Bajaj Auto Ltd. is set to acquire a controlling stake in KTM AG, the financially troubled Austrian motorbike company it has long co-owned. To facilitate the acquisition and prevent KTM from going bankrupt, Bajaj has arranged a debt funding package worth up to €800 million (USD907 million), the company said in a regulatory filing in Mumbai.
As part of the financial rescue, Bajaj has already injected €200 million into KTM and plans to provide the remaining amount soon, ahead of a critical repayment deadline. The total package includes a €450 million secured term loan for KTM and €150 million in convertible bonds issued by its parent company, Pierer Bajaj AG.
Moreover, this deal will shift control of KTM to Bajaj, marking a significant change in ownership. Bajaj Auto’s Netherlands-based subsidiary, Bajaj Auto International Holdings, will acquire a controlling interest in Pierer Bajaj AG. Currently, Bajaj holds a 49.9 percent stake in Pierer Bajaj, which in turn owns about 75 percent of Pierer Mobility AG.
This is the publicly listed parent of KTM. After the deal, Bajaj will take majority control of the iconic European brand. The cash infusion will enable KTM to comply with a restructuring agreement made with creditors in February, which is designed to save the company from liquidation.
Under the terms, creditors of KTM and its affiliates also accepted a 70 percent reduction on their claims in exchange for expedited repayment by the end of May. However, the restructuring plan has faced criticism from creditors, notably U.S. hedge fund Whitebox Advisors.
On top of that, the firm, which had purchased KTM’s discounted promissory notes (Schuldschein), argued the arrangement allowed current shareholders to regain ownership at an unfairly low cost. Pending regulatory approval, the deal will give Bajaj full operational control of KTM, moving beyond its former role as a minority stakeholder.
This also signals a leadership shift as CEO Stefan Pierer, a long-time executive and co-owner, will step down. KTM filed for insolvency in November 2024, hit hard by fluctuating demand during the pandemic and burdened with unsold inventory. The crisis placed thousands of jobs at risk and severely impacted Austria’s industrial sector.
Looking ahead, Bajaj plans to restart KTM’s production in Austria and strengthen its joint venture operations in India, potentially rejuvenating the brand’s global presence. We got all this from Bloomberg and their full article is linked here. Thank you Bloomberg for the information and images.
