KTM’s creditors approve restructuring plan as company’s future is secured

KTM’s creditors have approved the company’s restructuring plan following a vote at the regional court in Ried im Innkreis in Upper Austria on Tuesday.

Claims totalling 2.25 billion euros were presented at the court, out of which debt worth two billion euros was recognised.

KTM’s restructuring plan provided for a cash quote of 30%, amounting to around 600 million euros, which is to be paid by the end of May. In addition, around 150 million euros are needed to gradually ramp up production at its main plant in Mattighofen from mid-March. This would ensure the company’s operations, with around 2000 employees, until the end of May.

The hearing began at 0900 and was initially scheduled to last three hours, as there were 3847 claims filed by creditors. The jury room in the regional court was full with around 100 people being present. KTM CEO Gottfried Neumeister and co-CEO Stefan Pierer were among those in attendance.

KTM AG owes around 180 banks a sum of 1.3 billion euros. The banks had previously called for a higher cash ratio and therefore it was unclear whether the restructuring plan would be accepted.

Shortly before 1400, it was confirmed that the creditors had approved the restructuring plan.

“This plan provides for creditors to receive a cash quota of 30% of their claims in the form of a one-off payment (cash quota),” read a statement from Pierer Mobility AG.

“In order to fulfil the quota of 30%, KTM AG must deposit an amount of EUR 548 million with the restructuring administrator by 23 May 2025 at the latest.

“The court will then confirm the restructuring plan at the beginning of June 2025 and the restructuring proceedings of KTM AG will end once it becomes legally binding.”

It was also confirmed that the financial settlement means plans for increased production in mid-March are guaranteed. A sum of 50 million euros will be made available from the expanded group of shareholders to covers costs for the month of March.

“The planned full capacity of the four production lines in single-shift operation is to be achieved within three months,” is the further plan of Pierer Mobility AG.

In the afternoon, two creditors’ votes will be held at the Ried im Innkreis Regional Court regarding the subsidiaries KTM Components GmbH and KTM Forschungs- & Entwicklungs GmbH. These involve smaller sums. It is expected that their restructuring plan will also be approved.

Investor still unknown

According to the Alpine Creditors Association (AKV), the judicial confirmation of the restructuring proceedings is dependent on the continuation costs of 150 million euros incurred by 23 May 2025 being deposited.

The first tranche, namely the 50 million euros for the month of March, was already deposited in a trust account of the restructuring administrator on Monday. A total of around 750 million euros (600 for the cash quota and 150 for the continuation) must be deposited by 23 May.

According to AKV, the name of the financing investor remains unknown.

Bajaj Auto, which owns a 49.9% stake in KTM, had injected 50 million euros into the company in the form of a loan.

Pierer Mobility AG also stated in another press release that fresh capital of 800 million euros is required. This is needed to finance the cash quota and to further production.

Citigroup Global Markets Europe AG has been commissioned to support the investment so that the process is structured and transparent.