KTM’s creditors accepted the company’s restructuring plan. There is a now a path to move forward and to begin full production again. The plan was accepted just days before the February 27 deadline for KTM AG’s self-administration proceedings.
“I am grateful and happy today. KTM is back on track. Our employees have done everything over the last three months to ensure that the race can continue. We have closed an important chapter today,” says Gottfried Neumeister, chief executive officer of PIERER Mobility AG, the parent company of KTM AG.
Under terms of this reorganization, creditors will receive a cash quota of 30% of their claims, which amounts to a total of € 548 million (US$ 576.1 million), from KTM AG by May 23. Once that one-off payment is completed, the restructuring plan will need to be approved in court to become legally binding.
KTM AG will also receive a total of € 50 million (US$52.6 million) from “an extended circle of shareholders” which will be used to ramp up production gradually, starting in mid-March. KTM aims to have four production lines running at full capacity in single-shift operation within three months.
KTM still has a significant target to accomplish. In addition to the € 50 million from shareholders, the company still needs about € 800 million (US$ 841.3 million) in new capital to finance the creditor’s cash quota and further ramp up production. Citigroup Global Markets Europe AG has been tasked with helping secure new investments.
For such additional capital needed—- as per the rumor mill, names such as Bajaj (which is already a significant shareholder), CFMOTO (which already has a partnership with KTM), and Red Bull (which sponsors much of KTM’s racing programs) have cropped up—but so far, there are no hints nor signs of these investments moving forward.
—-Wayfarer
