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In connection with KTM AG's insolvency proceedings, those involved are confronted with alternating positive and negative news. On the one hand, Baja Auto in India has now transferred the third tranche of the €150 million that was and will be needed to operate the company and gradually ramp up production for the second half of March, April, and May. On the other hand, the ailing Pierer Mobility AG had to admit today: Due to the dramatic drop in sales in the 2025 fiscal year, the company's share capital was halved. Due to the severe losses in the previous year, which led to the loss of half of the share capital, another extraordinary general meeting is necessary; it has been scheduled for April 25th.
The Pierer Group announced that equity is expected to be significantly negative as of December 31, 2024. As part of the measures to fulfill the KTM Group's 30 percent restructuring plan quota, which must be deposited in the amount of €600 million by May 23, new capital measures are to be approved at the extraordinary General Meeting. For shareholders, the planned measures mean a noticeable dilution of their shares. The measures announced today by the Pierer Group are due to legal regulations. They state: If only half of the registered capital remains, the affected company must take capital market measures or plan its earnings situation in such a way that the missing share capital can be replenished within two years. However, KTM AG's earnings situation is subject to many uncertainties for the next two years. Therefore, fresh capital must be urgently injected.
The KTM Management Board and Supervisory Board will therefore propose to the extraordinary General Meeting that capital measures be approved at an issue price of €7.50 per share, Pierer Mobility announced Friday morning. In a first step, the Annual General Meeting will vote on a cash capital increase of €150 million. On April 3, the Pierer share price was €17.05.
In a second step, on April 25, a capital increase against contributions in kind, excluding statutory subscription rights, in the amount of €200 million will be approved, which can be implemented after the successful completion of the KTM Group's restructuring proceedings. Only the majority shareholder, Pierer Bajaj AG, will be authorized to subscribe to this capital increase.
Pierer Bajaj AG intends to contribute the loans made available so far totaling €150 million as a contribution in kind, with the third and so far final tranche of €50 million being paid out yesterday. A further proposed loan of €50 million will also be made as a contribution in kind, Pierer Mobility AG announced. The funds for these loans were provided to Pierer Bajaj AG by major shareholder Bajaj Auto from India. The measures now planned are intended to increase the holding company's share capital "approximately 2.4 times." This is assuming that the annual general meeting votes in favor of this plan. Since Bajaj Auto also intends to transfer at least half of the €600 million due to pay the 30% share to creditors by May 23, 2025, many experts assume that Bajaj will soon become the new majority owner of KTM AG, replacing Stefan Pierer.
Stefan Pierer, who stepped down as KTM CEO in January 2025, has worked closely with the strategic partner from India for more than ten years. As of December 31, 2014, Cross Industries held a 51.18% stake in KTM, and the Indian company Bajaj Auto held a 47.99% stake. At that time, only 0.83% of the shares were in free float. Cross Industries was majority owned by a holding company owned by KTM CEO Stefan Pierer. The financial holding company has since been renamed Pierer Mobility AG, and the operating company is KTM AG, which became insolvent on November 29 and had to endure three months of insolvency proceedings.
At the turn of the year, it was announced that the Austrian company had commissioned the US investment firm Citigroup to search for new investors. The up-and-coming Chinese motorcycle manufacturer CFMOTO was also mentioned as a possible investor. However, CFMOTO has so far only increased its stake in Pierer Mobility AG to 2 percent.
The Canadian BRP Group (Bombardier Recreational Products) and the successful Austrian entrepreneur Siegfried Wolf (owner of Steyr Automotive and former head of Magna Europe) have recently been mentioned as possible new investors. Interestingly, the BRP Group owns the former Rotax plant in Gunskirchen near Wels, about 60 km from Mattighofen, which produces Ski-Doos as well as Can-Am off-road vehicles. Rotax built 650 cc four-stroke single-cylinder engines for KTM in the 1970s and later developed the first 125 cc and 250 cc GP engines for Aprilia Reparto Corse in Noale in the 1990s.
The new KTM Supervisory Board Chairman, Stephan Zöchling (CEO and co-owner of the Austrian exhaust system manufacturer Remus), has also announced an investment and already provided a double-digit million euro sum to save the company in December. Former KTM CEO Stefan Pierer reportedly contributed a three-digit million sum to save his life's work in December.
Meanwhile, negotiations regarding the future ownership structure of Pierer Mobility AG and KTM AG continue unabated. Through the restructuring program, job cuts, and drastic austerity measures, KTM must become debt-free, rehabilitated, and prepared for future economic challenges. Not least, it is a question of who will have future influence over the troubled company, which more than ten years ago blossomed into Europe's largest motorcycle manufacturer.
An Austrian solution, in which CEO Gottfried Neumeister, along with domestic banks and investors such as Stephan Zöchling and Siegfried Wolf, will play a key role, does not seem entirely out of the question.
With the restructuring steps announced today, Bajaj Auto will initially become the new majority owner of KTM AG. However, the final ownership structure will not become clear until June. If other major investors actually put their intentions into action and invest in KTM AG!
In this power struggle, some participants are anything but squeamish. KTM announced on Tuesday (April 1) that a major Austrian bank had claimed €65 million from KTM in a letter from its lawyers because Pierer Mobility had signed a letter of comfort with this bank for KTM companies. Pierer managers categorically reject these claims. There is "no obligation to provide funds" in favor of the bank. The allegations that funds were pre-disbursed to creditors are incorrect.
KTM's board members are convinced that the €600 million due can be transferred to the creditors on time on May 23. The US private equity firm Apollo Global Management, based in New York City, and BlackRock Asset Management, one of the world's leading investment managers, are also prepared to participate in KTM's restructuring.
It is becoming apparent that an Austrian solution can be found under the new KTM CEO, Gottfried Neumeister, in which, in addition to Austrian banks and Stefan Pierer, other red-white-red companies such as Siegfried Wolf and Stephan Zöchling will play a key role.
KTM is facing headwinds in America, where sales of $1 billion were still expected in 2023. Due to the new 20 percent tariffs on motorcycles from the EU, higher prices in the US for KTM, Husqvarna, and GASGAS are threatened – or narrower profit margins. It will therefore likely take some time before KTM returns to steady waters and returns to profit.
In the spring, the financial difficulties are expected to be alleviated by a mid-double-digit million euro bank transfer, which will be secured through the reversal sale of the 50.1 percent stake in MV Agusta Motor. To this end, the sale of the US bicycle manufacturer FELT (purchased for $12 million) is finally to go through. A buyer is also being sought for KTM's not exactly profitable x-Bow sports car project in Graz.
