KTM on Recovery Path with Bajaj Auto’s €150 Million Investment

Bajaj, which manufactures several KTM models in India, including the Duke, RC, and Adventure series, has stepped in to assist its struggling Austrian partner amid ongoing financial challenges. According to the recent regulatory filing, the company’s Board of Directors has approved an investment of up to Euro 150 million (approximately Rs 1,364 crore) into its wholly-owned subsidiary, Bajaj Auto International Holdings BV (BAIH BV) in the Netherlands. The funds will be provided in the form of equity capital, preference capital, or a loan (convertible or otherwise). Notably, BAIH BV holds a 49.9% stake in Pierer Bajaj AG, which owns a majority 75% share in Pierer Mobility AG, the parent company of KTM. From the total investment, the filing highlights that BAIH BV has extended a loan of Euro 50 million (approximately Rs 455.56 crore) to Pierer Bajaj AG.

Last year, KTM found itself in a critical financial crisis, urgently requiring funds to stabilise its operations. Bajaj’s intervention has come as a welcome relief, offering essential support to the Austrian brand. Despite Bajaj's lack of official confirmation, the substantial Rs 1,364 crore investment in its Dutch holding company strongly suggests the homegrown automaker’s intent to bolster KTM's financial footing in Europe.

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For now, there has been no official word on how the funds will be utilised or directed. It is also unclear whether this significant investment will elevate Bajaj Auto to the role of KTM’s largest shareholder. However, what's evident is that the strong partnership between the two companies is set to grow even more resilient as they tackle KTM's financial struggles hand in hand.

KTM's Restructuring Plan Gets Creditor Approval

In November of the previous year, KTM AG, a fully owned subsidiary of PIERER Mobility AG, took the critical step of initiating court-supervised restructuring proceedings with self-administration. The goal was to reach an agreement with creditors on a restructuring plan within 90 days. Fast forward to recent developments, and creditors have given the green light to the proposed plan, which outlines a 30% one-time cash payment against their claims. To meet this obligation, KTM AG must deposit Euro 548 million (approximately Rs 5,017 crore) with the restructuring administrator by May 23, 2025. Once the court formally ratifies the plan in June 2025, the restructuring process will conclude, marking the end of this tumultuous chapter.

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The approval guarantees KTM's independence, safeguarding it from any potential sale to third parties. Additionally, production at its Austrian plants is set to gradually resume starting mid-March 2025. To secure its future and overcome these financial hurdles, KTM needs a total of Euro 800 million to cover both the cash payout to creditors and the costs of scaling up production.