KTM AG Reorganization Plan Accepted by Creditors
KTM AG parent company PIERER Mobility claims it is "Back on track" with the announcement that the restructuring plan lodged as a result of its November 20, 2024, self-administration court restructuring proceedings (Austria, February 25, 2025) has been accepted by KTM's creditors.
The aim of the proceedings was to agree a restructuring plan with the creditors within 90 days, and the plan that has been accepted meets that deadline.
KTM AG must deposit an amount of € 548m (a 30% quota of its creditor indebtedness) with the restructuring administrator by May 23, 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.
Further fresh capital of around € 800m will be required with the intention being to see production ramped up again from mid-March 2025. In this regard, no mention is made of what happens with the unsold inventory.
In accepting and adopting the restructuring plan, the creditors will see the cash quota of 30% paid to them in settlement of their claims as soon after it has been deposited with the restructuring administrator as possible.
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| Gottfried Neumeister, CEO of PIERER Mobility AG: "I am grateful and happy today. KTM is back on track. Our employees have done everything over the last three months to ensure that the race can continue. We have closed an important chapter today. But a single chapter never tells the whole story." |
This outcome had been expected and differs from original proposals that would have seen creditors receiving 30% of what they are owed over an extended timeframe of up to 24 months.
In a statement that may well be met with a degree of cynicism, Gottfried Neumeister, CEO of PIERER Mobility AG, is quoted as stating: "I am grateful and happy today. KTM is back on track. Our employees have done everything over the last three months to ensure that the race can continue. We have closed an important chapter today. But a single chapter never tells the whole story.
"Now we can continue the great story of KTM. We do it for the millions of KTM fans worldwide, to whom we are grateful every day. For our racers, of whom we are damn proud. And for our Austrian location, to which we are deeply attached in our hearts. KTM remains one of the top employers in the Upper Austrian industry."
The Pierer AG/KTM AG statement goes on to say that "in order to finance the cash quota and further production, the Group requires fresh capital of around € 800m. Citigroup Global Markets Europe AG ("Citigroup") was commissioned to support this investment process in a structured, transparent and efficient manner in the interests of all stakeholders.
"To enable production to be ramped up again gradually from mid-March 2025, KTM AG will be provided with financial resources totaling € 50m from the extended circle of shareholders. The planned full capacity utilization of the four production lines in single-shift operation is to be achieved within three months."
