Among all the flap of EICMA, with new models being released and concept bikes teased, some other news came out—KTM’s financial problems are reaching a crisis point.
KTM has been dealing with money problems seemingly ever since they got tied up with MV Agusta; the first serious signs of trouble came last fall, when KTM’s parent company, Pierer AG, announced significant cutbacks in their Euro staff, with jobs moving overseas. KTM’s line at that time was that it was mostly menial factory work that was lost, so it wasn’t a big deal.
But the cutbacks continued; the factory rally raid team, the most dominant squad in the history of motorcycle racing, saw stars like Toby Price without their contracts renewed, and young up-and-comers like Mason Klein ended up without the deals they thought had been confirmed. As 2024 rolled on, KTM’s stock price continued to decline, the company announced further financial woes, reducing its forward-looking projections and then dropping them altogether.
And then EICMA came, with what appeared to be a somewhat disorganized appearance from KTM, despite their large number of new bikes. Perhaps they were off their usual A Game because of cutbacks? Makes sense, because a few days later, Pierer AG posted this to their website:
PIERER Mobility AG: Far-reaching restructuring and additional liquidity requirement at KTM AG
In the course of liquidity planning for the 2025 financial year, PIERER Mobility AG has to cover additional liquidity requirements at the level of KTM AG. As of June 30, 2024, the KTM AG Group was responsible for more than 95% of PIERER Mobility AG’s revenue.
Ongoing discussions with core shareholder Pierer Bajaj AG and major financial creditors of KTM AG on financial restructuring
The Executive Board is currently working on securing the financing of KTM AG, in particular on a bridge financing in the three-digit million range. To this end, discussions are ongoing both with the core shareholder Pierer Bajaj AG and with existing financial creditors. The aim is to agree a standstill agreement with the financial creditors involved for the duration of these discussions as basis for the financial restructuring.
The negotiations and discussions are currently at an early stage. It is therefore not yet possible to make any concrete statements about the outcome of the negotiations, the conditions and the size of an additional financing.
Far-reaching restructuring necessary at KTM AG level
In addition to securing liquidity, the Executive Board is endeavouring to put KTM AG back on a stable operational and financial basis. Against the backdrop of a challenging economic environment, an even more far-reaching operational restructuring is being driven forward with the aim of reducing inventories at both KTM AG and the dealer level to an economically sustainable level by significantly reducing production volumes. Furthermore, overheads are also to be significantly reduced once again.
The aim is to stabilize costs and sales at a redimensioned level from the 2025 financial year and thus create the basis for sustainable competitiveness and profitability.
Further information will be published in due course.
Translation: Pierer AG is running out of money, and KTM is their only real producing asset (Husqvarna and GasGas don’t seem to be bringing in much cash). So, they are trying to figure out how to bring in more bucks; don’t be shocked if that means India-based Bajaj, already owner of almost half the company, ends up with a majority stake in a few weeks.
It’s surprising to hear that KTM’s parent company is facing financial trouble, given their reputation for high-performance motorcycles. This could impact the brand’s future innovations and market presence. Enthusiasts hope for a recovery to keep KTM’s legacy alive in the competitive two-wheeler industry. Let’s see how this unfolds!
Instead than fixing the problems with their own bikes, they are concentrating on purchasing brands like Gas Gas and MV Agusta, which is disheartening. Unfortunately, they seem to have lost their way.
It’s disappointing to see them focusing on acquiring brands like Gas Gas and MV Agusta instead of addressing the issues with their own bikes. Unfortunately, it feels like they’ve lost their direction.
Let’s hope the talks with Bajaj AG result in a solution that helps KTM stabilize and keep producing the bikes we all admire.
It serves as a reminder of the challenges the industry faces, even for iconic brands.
Let’s hope the discussions with Bajaj AG lead to a resolution that allows KTM to stabilize and continue producing the bikes we all love.
It’s a reminder of how challenging the industry can be, even for iconic brands.
KTM has been a powerhouse in innovation and racing, so hearing about their financial struggles and potential restructuring is a bit unsettling.
Bajaj will bail them out, and hopefully clean up their reputation at the same time.
let’s see they keep buying up companies like gas gas and mv agusta rather than work out the problems with the bikes they have. sadly they have lost there way.