KTM Faces Bankruptcy, Enters Self-Administration to Restructure

Pierer Mobility Group, the parent company of struggling motorcycle manufacturer KTM, announced that the Austrian brand will enter self-administration and initiate judicial restructuring proceedings. Plagued by a severe financial crisis, KTM had been seeking at least €100 million in funding to remain operational beyond 2024. To mitigate the situation, the company has already laid off hundreds of employees and plans to halt bike production during January and February 2025.

With the deadline for securing the necessary funding looming, KTM's management has been forced to initiate the formal restructuring process. Self-administration will allow the company to retain control while operating under court supervision and develop a reorganisation plan. KTM aims to agree with its creditors within the next 90 days.

In a statement, Pierer Mobility group said: 'Redimensioning the group should not only secure the continued existence of the KTM Group in the long term5 but also create the basis for emerging stronger from the proceeding.

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'A redimensioning of production should lead to a gradual adjustment in excess stock at KTM and its dealers over the next two years. This will result in a reduction in operating performance at the Austrian sites totalling over EUR 1 billion in the years 2025 and 2026.

'The restructuring process will result in additional potential losses, for example due to one-off expenses such as necessary write-downs (e.g. for capitalized development costs) and costs for staff reductions as well as the shortfall in fixed costs due to the reduced operating performance and other costs arising from the restructuring process.'

KTM in Motorsport

KTM has dispelled rumours of a Red Bull bailout for its MotoGP team. Pierer Mobility Group's financial constraints have also necessitated adjustments to its motorsport programs. Husqvarna will withdraw support for Intact GP in Moto2 and Moto3, while KTM's Dakar Rally team will be scaled down to three riders for 2025.

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To streamline its motorsport efforts, Pierer Mobility will prioritise its KTM brand, with operating 2 teams under the KTM name.

Since its 2017 MotoGP entry, KTM has consistently aimed for race wins and world championships. The company remains committed to this goal, even as it navigates these challenging times.