Bajaj Auto is making a bold move to secure a majority stake in KTM, the globally renowned Austrian motorcycle brand. Through its Netherlands-based subsidiary, Bajaj Auto International Holdings BV (BAIHBV), the Indian automaker is transitioning from a minority investor to a key decision-maker in KTM’s parent company, aiming to steer the brand out of financial distress. Pending regulatory approvals, this acquisition marks a defining shift in Bajaj’s nearly two-decade-long alliance with KTM, which has seen Bajaj play a crucial role in manufacturing and exporting KTM bikes from India to over 80 global markets.
To breathe new life into KTM, Bajaj has mobilized an extensive €800 million (approximately Rs. 7,200 crore) debt restructuring package. Of this, €200 million has already been injected since FY2024 to sustain operations, while the remaining €600 million will be used to stabilize finances and resume production. The plan includes a secured term loan of €450 million from BAIHBV to KTM AG, complemented by €150 million in convertible bonds issued by PBAG, subscribed by BAIHBV. These funds will ultimately be used to clear creditor dues and cover revival costs.
This financial overhaul is part of a court-sanctioned restructuring initiative in Austria, following liquidity concerns that forced KTM and its key subsidiaries—KTM Components GmbH and KTM F&E GmbH—into self-administration in late 2024.
Key Moments in KTM’s Restructuring
- November 28, 2024 – KTM AG formally applies for judicial restructuring in Austria.
- February 25, 2025 – Creditors approve a restructuring plan involving a one-time 30% cash payout to settle claims.
- May 23, 2025 – Deadline to deposit the payout with the court-appointed administrator. If met, the court will finalize the restructuring by mid-June, paving the way for KTM’s recovery.
Bajaj’s timely intervention prevents insolvency by ensuring funds are placed in escrow for creditor payments, while production and supply chains resume.
The Bajaj-KTM Transaction Structure
Currently, Bajaj Auto indirectly owns 37.5% of KTM’s listed parent company, Pierer Mobility AG (PMAG), through a chain of investments. The acquisition will grant Bajaj control over Pierer Bajaj AG (PBAG), the Austrian holding firm with a commanding 75% stake in PMAG. Additionally, Bajaj has assumed an €80 million loan from a Pierer group entity, preventing foreclosure and safeguarding KTM’s restructuring roadmap.
Once regulatory approvals are secured, Bajaj plans to:
- Overhaul KTM’s governance and board structure.
- Implement a robust turnaround strategy.
- Expand joint product development between India and Austria.
- Seek strategic collaborations to enhance technology leadership and sustain long-term growth.
With this decisive step, Bajaj Auto is solidifying its foothold in the global premium motorcycle segment, reaffirming its enduring commitment to KTM while shaping the future of high-performance biking in India and across international markets.
—Wayfarer
Associate Editor
Bikernet.com ©
