Reorganization proceedings applied for: KTM facing insolvency – high three-digit million sum is missing

Reorganization proceedings applied for
KTM facing bankruptcy – high three-digit million sum missing

November 26, 2024, 5:05 p.m

Listen to article

Just like the car industry, motorcycle manufacturers are also suffering from declining sales figures. KTM is currently cutting 1,000 jobs. A three-digit million amount is missing. The company now wants to save itself by restructuring – and denies rumors about a prominent investor.

The ailing motorcycle manufacturer KTM AG wants to undergo restructuring proceedings. The Austrian company currently needs a high three-digit million amount, but the management “does not assume that it will be possible to secure the necessary interim financing in a timely manner,” said the owner Pierer Mobility AG in Mattighofen.

KTM will apply for judicial restructuring proceedings under self-administration. The company announced a reduction in production over the next two years in order to reduce inventory and ensure the long-term survival of the KTM Group.

In response to the collapse in demand, the company announced in mid-November that production would be cut back. Production will be suspended from Christmas to the end of February. Around 300 jobs will be cut by the beginning of 2025. Previously, 700 jobs had already been cut this year. KTM currently employs around 5,000 people in Austria.

Restructuring at KTM begins

As the parent company previously announced, discussions are currently being held with creditors and core shareholder Pierer Bajaj AG regarding the necessary bridging financing amounting to a three-digit million amount. In addition, all necessary restructuring measures would be examined. If many creditors demand their money during this phase, restructuring would hardly be possible. “The early termination of this financing would lead to the insolvency of Pierer Industrie AG,” the statement continued. This involves 250 million euros in liabilities.

The group therefore decided to initiate a European restructuring procedure in accordance with the Restructuring Regulations (ReO). Only certain creditors are affected by this procedure. All other liabilities will be serviced as agreed. The group is not over-indebted, it said.

Pierer Industrie is a European vehicle group that employs more than 10,000 people worldwide and generated sales of 3.6 billion euros in 2023. On Friday, the company denied media reports about billionaire Mark Mateschitz joining Pierer Mobility and its subsidiary KTM.