As KTM AG (the company that builds KTM, Husqvarna and GasGas motorcycles) gets ready for its big day in court on February 25, the company that controls it—Pierer Industries AG—is just leaving from its own court appearance on February 20, with its future looking secure.
On the 20th, Pierer Industries appeared in Wels Regional Court in Austria and received approval of a two-year plan to pay its bills. The plan, originally shown in late 2024, laid out a two-year schedule that sees them making a big payment in December of 2026, and another one in December of 2027, in order to clear their debts. This lets them avoid bankruptcy and stay in business, without having creditors picking over their bones.
Next, we see the subsidiary KTM AG in court on the 25th. The ownership structure here is a bit tricky; Pierer Industries AG owns 50.1 percent of Pierer Bajaj AG, which owns about 75 percent of Pierer Mobility AG, which controls KTM. But the bottom line is this: KTM AG’s creditors must OK a repayment plan that sees Team Orange paying about 600 million euros in order to clear its debt of approximately 2 billion euros. KTM AG proposes to pay this money back by the end of this May, instead of the longer time period allowed by law, and they also plan to restart production in March with a 150 million euro injection of cash that they say is already committed to.
No doubt that reboot will see a different-looking company, as KTM owes money to reportedly as many as 2,500 employees and 1,170 other creditors. They have a lot of people that may not wish to do business with them again, and some employees may have moved on. Ultimately, if the same people are in charge, though, it seems likely that the product lineup going forward will be similar to what is available now. What that means for the rest of the business remains to be seen—it is hard to imagine anyone getting excited about building new bikes when there are reportedly a whole year’s worth of machines backlogged and waiting to be sold.
“ reportedly a whole year’s worth of machines backlogged and waiting to be sold”
Well that’s a conundrum. Is KTM going to drastically discount all of their products to entice customers? What are the effects going to be on the market as a whole?
The bicycle industry has gone through a similar process where companies over produced trying to catch up from covid related issues. Unfortunately demand didn’t remain the same. Lots of discounts to be had.
I don’t believe supply chain issues were the cause of KTM’s demise, rather than too much expansion too quickly. That originated from the top. When I say demise I don’t believe they are going out of business however a lot of people are going to suffer as a result of poor business practices.