KTM will soon be back in business after creditors approved a €548m restructuring plan. This will allow the Austrian brand to resume production and begin repaying debts.
The company has also secured a €50m financial injection from an extended group of shareholders. CFMoto and Bajaj are likely in there as supporters. There are unconfirmed rumours that BMW may also be involved.
The German had been suggested as a white knight for KTM. However, it now appears a group of investors has come to the rescue of the ‘Ready to Race’ brand. Or should that be ‘Ready to Repay’?
The approval is all part of KTM AG’s court-approved restructuring process. This began in November of last year when the company entered into ‘self-administration’. The process allowed 90 days to agree a plan with creditors and that agreement has now been confirmed.
Creditors will receive 30 per cent of their claims in a one-off cash payment. KTM must deposit the full €548 million with its restructuring administrator by May 23, 2025.
Austrian courts should then confirm the restructuring plan in early June, at which point the company can go about its business without restrictions.
As part of cost-cutting measures, KTM had already culled around 600 jobs, while also axing much of its executive board. That includes former CEO, Stefan Pierer, who stepped down last month.
The financial injection of €50m will be used to restart production in March. KTM aims to get its four production lines back to full capacity within three months.
Evidently, the company has received a sizeable influx of cash from an anonymous investor.
KTM owes nearly $2 billion following purchases of brands such as MV Agusta. That coincided with a downturn in the global economy and fewer sales of their more expensive machines.
