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It is no coincidence that Stefan Pierer is handing over his resignation from the post of CEO of Pierer Mobility late this evening to his previous co-CEO Gottfried Neumeister, who came on board in September and has gained a lot of credibility with creditors and restructuring administrator Peter Vogl since the start of the insolvency proceedings (which began on November 29th) and has created a good and as trusting climate for discussions as possible. Pierer remains co-CEO and will "accompany the restructuring process", as was announced on Thursday evening.
KTM bankruptcy: Debts could grow
The next general meeting with KTM managers Stefan Pierer and Gottfried Neumeister and the creditors will take place tomorrow, January 24th. There is a fear that the liabilities, which were valued at 1.8 billion euros on December 20th, have increased further in recent days - and that Stefan Pierer (68) is therefore withdrawing from the command post. Despite increased motorcycle sales from 6,000 to 381,555 units between 1992 and 2023. But his rigorous expansion course ultimately failed after 13 record years in 2024.
It is not yet known exactly how high KTM AG's mountain of debt actually is. Although the deadline for claims against KTM and its two subsidiaries expired last week, credit protection agencies assume that painful additional demands are to be expected.
Cornelia Wesenauer from the Alpine Creditors Association (AKV) fears that more creditors will be added to the almost 5,400 creditors who filed claims on time. "We expect that further claims will be filed after the examination meeting on Friday 24th and that we will therefore be faced with further liabilities by the time of the voting meeting on February 25."
Additional demands are not unusual in such extensive bankruptcies. The creditors include 180 banks. The workforce may also still have outstanding claims, even though January wages have already been paid. But numerous terminated employees are demanding severance payments and outstanding holiday pay.
On February 25th, 2025, the creditors will decide on the quota that KTM must meet in repaying its debts. In restructuring proceedings with self-administration, the statutory minimum quota is 30 percent. This means that KTM AG cannot offer a quota lower than 30 percent. And KTM insolvency administrator Peter Vogl has recently not ruled out a higher quota.
Stefan Pierer is resigning as CEO of the financial holding company Pierer Mobility AG as part of the restructuring and reorganization attempt by KTM and associated companies.
It has now been admitted that Pierer Mobility AG will have to accept deep red figures for 2024. These losses, which are expected for the previous year according to the group announcement, are no surprise given the billion-dollar insolvencies in the Pierer corporate network with KTM AG and its subsidiaries.
Compared to 2023, group sales fell by 29 percent last year, from 2.6 to 1.9 billion euros. Motorcycle sales fell by 21 percent to 292,497. An operating negative result of around 300 million euros is expected before depreciation (EBITDA). Further write-downs are to be expected as part of the restructuring process, because every "asset" loses between 15 and 20 percent of its value on the day of the insolvency proceedings.
The sale of brands such as Felt, MV Agusta and the sports car factory X-Bow is intended to bring fresh money into the empty coffers for the restructuring. Thanks to existing partners such as Bajaj Auto (India) and CFMOTO (China) as well as new investors such as FountainInvest (Hong Kong), promising commitments for 900 million euros are already in place, it was reported at the beginning of this week.
"Expected impairments (i.e. a fall in value) on intangible assets and goodwill will place an additional burden on EBIT (result from operating activities after depreciation)," Pierer Mobility reported in its press release in the evening. Free cash flow will amount to a high negative three-digit million amount, and net debt will continue to rise.
1,800 employees laid off
The 2024 financial year was marked by far-reaching restructuring measures, cost-cutting measures and bankruptcies. So far, a total of more than 1,800 employees have been laid off across the group. Production output has already been reduced by 30 percent in 2024, but the inventory of unsold motorcycles at dealers and national importers has nevertheless grown to 130,000 units.
By reducing production volume to around 230,000 motorcycles (minus 26 percent), global inventory levels have been reduced by around 40,000 units (minus 18 percent). "This represents a first important step in the restructuring plan," says Pierer Mobility.
Around 110,000 motorcycles were sold in Europe last year, accounting for 38 percent of group sales. North America accounted for 24%, India and Indonesia (via partner Bajaj) 21% and the other sales countries 17%.
Customer demand remained strong despite the deep corporate crisis, it was announced today. Sales partners and dealers sold around 268,000 motorcycles to end customers, which corresponds to the previous year's level, according to Pierer Mobility.
The Austrian company plans to produce 250,000 motorcycles in 2025 and to reduce the workforce to around 4000.
