KTM Receives Court Approval for Financial Restructuring Plan

After months of contemplation and tribulation, Austrian giant KTM is now ready to get back on its feet again after a regional court approved its restructuring plans.` The court in Ried im Innkreis has formally approved the brand’s restructuring plans for KTM AG, KTM Components GmbH, and KTM Forschungs & Entwicklungs GmbH. The approval came after a mandatory two-week appeal period expired without challenges after Bajaj expressed its intention to take over the bikemaker. This also signals that Bajaj Auto will take over the Austrian brand; however, no confirmation has yet come from the Indian two-wheeler giant. 

(Also Read: Bajaj Announces Its Future Plans For KTM)

The restructuring addresses financial difficulties caused by increased manufacturing costs and European supply chain disruptions that affected the Pierer Mobility-owned company earlier this year. Under the approved plan, creditors will receive 30 per cent of their recognised claims, which amounts to 525 million Euros (i.e. approx ₹5,219 crore) through restructuring administrators, which will be paid by Bajaj Auto. While not a complete recovery, the legally binding agreement provides a clear path forward for the company. The settlement allows KTM, along with its Husqvarna and GASGAS brands, to resume normal operations with reduced financial obligations. 

(Also Read: Rajiv Bajaj To Step Down From KTM’s Supervisory Board)

"I am relieved and grateful that we have finally been able to close this difficult chapter. Our focus is now on ramping up production at the end of July and realigning the group. I would like to take this opportunity to express my special thanks, recognition, and appreciation to Dr. Ulla Reisch, one of the best insolvency law experts in our country, who guided us through these three proceedings not only with her expertise but also with her tireless commitment," noted Gottfried Neumeister, CEO of PIERER Mobility AG. The company plans to restart manufacturing at its Mattighofen facility by the end of July, targeting the remainder of the summer riding season.