You are here

MotoGP, Pierer Mobility: Finally some good news at the year's end

The insolvency administrator Peter Vogl is not averse to approving the KTM plans to continue the most important motorsport activities. Stefan Pierer himself also plans to personally contribute to the restructuring by selling real estate and land through Pierer Immoreal GmbH in Wels

MotoGP: Pierer Mobility: Finally some good news at the year's end

Over the last two months, bad news has rained down on the KTM managers in charge, the board members, employees, team members and partners, creditors, customers and lending banks almost every day. The stock price plummeted, and on November 29, 2024, KTM AG (in Mattighofen) and its two subsidiaries KTM Components GmbH (in Munderfing) and KTM Forschungs- und Entwicklungs-GmbH (which is Research & Development) in Mattighofen had to file for insolvency proceedings on their own responsibility after liabilities of between 1.8 and 2 billion euros had accumulated. In addition, a stock of 130,000 unsold motorcycles was reported because production had not been reduced in time despite the gloomy outlook.

Other subsidiaries also ran out of money, and the Austrian motorcycle manufacturer also had to make the painful decision to sell its 51.1 percent stake in the Italian luxury brand MV Agusta. In addition, wages and salaries for November and December plus Christmas bonuses could not be paid.

But since December 19, the share price of Pierer Mobility AG on the Vienna Stock Exchange has almost doubled from € 11.00 to € 19.84% within just a few trading days. The share price climbed by 35 percent in Vienna on December 20, then by 14.59% December 23 and today by an astonishing 19.84%.

Investors and share buyers are apparently convinced that KTM AG will successfully complete the insolvency proceedings scheduled for three months on its own responsibility. The announced cost-cutting measures, the strict restructuring program, the reduction of the workforce to 3,700 employees and the restriction to an annual production of 250,000 motorcycles are intended to be a sustainable response to the changed economic conditions.

The fact that KTM AG paid out the December salaries today - albeit late - also contributed to the improved mood.

At the first creditors' meeting on December 20, it was announced that three investors intend to contribute a total of around 700 million euros to the restructuring, as CEO Stefan Pierer (68) is looking for new co-owners. The Indian 48% shareholder Bajaj Auto, which builds the majority of Pierer Group motorcycles up to 400 cc, will do its part to save the company. Citigroup Global Markets Europe has been commissioned to support Europe's largest motorcycle manufacturer in the process to find new investors. Stefan Pierer himself also plans to personally contribute to the restructuring by selling real estate and land through Pierer Immoreal GmbH in Wels. This was particularly strongly demanded by some politicians and trade unionists in Upper Austria.

The short-term financial requirement amounts to around 540 million euros. This corresponds to the 30 percent quota with which the creditors (including 180 banks) are to be compensated. In total, the liabilities amount to 1.8 billion euros.

According to initial observations, the insolvency administrator Peter Vogl is not averse to approving the KTM plans to continue the most important motorsport activities, because the "Ready to Race" strategy is an important success factor for the KTM brand and the World Championship commitment of the subsidiaries Husqvarna and GASGAS in top-class sport has already been rigorously scaled back for 2025. KTM has won 13 motorcycle world titles in 2024 – and a total of 348 since 1974.

KTM AG therefore emphasized again on December 20th that its participation in the Moto3, Moto2 and MotoGP World Championships will continue as planned. For the MotoGP World Championship, contracts exist with Dorna and with Tech3 team owner Hervé Ponchral until the end of 2026.

Brad Binder and super talent Pedro Acosta are planned as factory riders for the Red Bull KTM Factory Team, while Maverick Viñales and Enea Bastianini are under contract for the Red Bull KTM Tech3 Team.

Related articles

 
 
Privacy Policy