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KTM has received approval from its creditors for a comprehensive restructuring plan, with the decision confirmed during a court session held on Tuesday at the regional court in Ried im Innkreis, Upper Austria.
The total claims presented to the court amounted to 2.25 billion euros, of which debts totaling two billion euros were formally recognized. The approved restructuring plan stipulates a cash settlement of 30%, which translates to approximately 600 million euros that must be paid by the end of May. Furthermore, an additional 150 million euros will be necessary to gradually restore production capabilities at the company’s primary facility in Mattighofen starting mid-March, ensuring steady operations for its workforce of around 2,000 until late May.
The hearing commenced at 0900 and was designed to last three hours due to the 3,847 claims brought forth by creditors. The courtroom was at full capacity, including notable attendees such as KTM CEO Gottfried Neumeister and co-CEO Stefan Pierer.
KTM AG’s financial obligations extend to approximately 180 banks, with a total debt of 1.3 billion euros. These banks had previously advocated for a higher cash ratio, which raised questions about whether the restructuring proposal would gain necessary approval.
By early afternoon, confirmation arrived that the creditors had indeed accepted the restructuring plan.
“This strategy allows creditors to receive a 30% cash quota of their claims through a one-time payment,” stated Pierer Mobility AG.
“To meet this 30% quota, KTM AG is tasked with depositing 548 million euros with the restructuring administrator no later than 23 May 2025. The court is expected to affirm the restructuring plan in early June 2025, marking the conclusion of KTM AG’s restructuring proceedings upon becoming legally binding.”
It was also noted that the approval of the financial settlement secures the plans for increased production capabilities in mid-March. A provision of 50 million euros has been earmarked from the expanded group of shareholders for March’s operational costs.
“We aim to achieve full capacity utilization across four production lines operating on a single shift within three months,” Pierer Mobility AG further elaborated.
Later in the day, two additional creditor votes were scheduled at the Ried im Innkreis Regional Court concerning KTM’s subsidiaries, KTM Components GmbH and KTM Forschungs- & Entwicklungs GmbH, which involves smaller financial sums. Approval of their restructuring plans is also anticipated.
Unidentified Investor
The Alpine Creditors Association (AKV) indicated that judicial confirmation of the restructuring process hinges on the timely deposit of the 150 million euros required for continuation costs by 23 May 2025.
The first tranche, 50 million euros earmarked for March, was already deposited into a trust account managed by the restructuring administrator on Monday. In total, an estimated 750 million euros—600 million for the cash quotient and 150 million for ongoing operations—needs to be deposited by May 23.
The specifics regarding the identity of the financing investor remain undisclosed. Bajaj Auto, holding a 49.9% share in KTM, has previously lent 50 million euros to the company.
Furthermore, Pierer Mobility AG has indicated the necessity of raising 800 million euros in fresh capital to cover both the cash quota and to facilitate further production efforts.
Citigroup Global Markets Europe AG has been retained to assist in structuring this investment process to ensure clarity and transparency.
Source
www.autosport.com