The Austrian motorcycle manufacturer faced a severe financial crisis, leading to self-administration and a comprehensive restructuring process. The secured funding is crucial for meeting a critical payment deadline to creditors, covering 30% of the company's outstanding debts, which are estimated to exceed €2 billion.
Major shareholder Bajaj Auto Ltd. played a pivotal role in this financial turnaround. Bajaj's European arm secured a €566 million unsecured loan from global financial institutions, including JP Morgan Chase & Co., DBS Bank Ltd., and Citigroup Inc. While the official statements did not explicitly name KTM as the beneficiary, regulatory filings suggest that these funds were intended to support KTM's financial obligations.
This financial infusion follows a regional court's approval of KTM's restructuring proposal, which included a significant reduction of its debts-a move that required creditor approval and underscored the urgency of securing new capital.
Since initiating self-administration, KTM has undergone significant internal changes, including layoffs, a temporary suspension of motorcycle production, restructuring of its board of directors, and the sale of investments, including shares in MV Agusta.
With this substantial funding, KTM is poised to navigate its financial challenges and continue its legacy in the motorcycle industry. The company's commitment to innovation and quality remains steadfast, and this financial stability is expected to bolster its operations and market presence.
