Hope for KTM as Bajaj offers a lifeline

KTM has been given a glimmer of hope, with the embattled company announcing that it has secured financing to fulfil its legal restructuring plans. 

A press release said: “Pierer Mobility AG and KTM AG have received financing commitments, subject to the execution of the requisite agreements.” 

This news means that KTM will be able to pay off the required 30 per cent of its estimated EUR 2.25 billion debt to creditors by the May 23 deadline, as per the restructuring plan approved in February. 

In theory, this allows KTM to proceed with a clean sheet, free of debt. 

KTM did not specify where the money is coming from, but multiple global media outlets are suggesting that major shareholder Bajaj Auto has secured the necessary funds. 

Bloomberg first reported the news on May 18, saying that “KTM co-owner, Bajaj Auto signs EUR 566 million loan before funding deadline”. 

Meanwhile, motorsport website Crash says that “the loan has been guaranteed by JPMorgan Chase, DBS Bank of Singapore, and Citigroup”. 

India's Bajaj Auto currently owns 49.9 per cent of Pierer Bajaj AG, the parent company of Pierer Mobility Group, which is in turn the parent of KTM AG. While saving KTM will no doubt give Bajaj more influence over the Austrian brand, it is unclear if it will result in any increase in its share of the company.