The news about the financial difficulties of the Austrian motorcycle manufacturer KTM does not stop. On Monday, Pierer Industrie AG announced the opening of European restructuring proceedings in accordance with the Restructuring Regulation (RoE).
This measure aims to extend the maturity period of debt securities and loans. Concretely, the restructuring procedure is necessary to be able to “fully repay the financing of 250 million euros”, according to a press release..
With this procedure, Pierer Industrie AG wants to protect itself against insolvency. Due to the difficulties, three loans totaling the aforementioned amount could be executed in advance. This could lead to an insolvency situation.
Pierer Mobility AG had to announce on Tuesday that motorcycle manufacturer KTM was insolvent. A bankruptcy application with personal liability is being prepared.
Specifically, Tuesday's announcement states: “KTM AG, a 100% subsidiary of Pierer Mobility AG, will request the initiation of judicial restructuring proceedings with self-administration on November 29, 2024,” which is known as the name of bankruptcy.
“The financing requirements of KTM AG currently amount to a high three-digit amount. Management does not currently assume that it will be possible to obtain the necessary interim financing on time,” the note continues.
Dani Pedrosa, who recently renewed a season as a KTM test rider, alongside KTM Group CEO Stefan Pierer
Photo by: Gold and Goose / Motorsport Images
“This is why the Board of Directors of KTM AG has decided to submit an application today for the opening of judicial reorganization procedure with self-administration over the assets of KTM AG and its subsidiaries KTM Components GmbH and KTM F&E GmbH“.
“The procedure offers the possibility to continue to manage the assets under supervision and to reorganize the KTM Group independently. All other subsidiaries of KTM AG, in particular all sales companies, are not affected.”
“The objective of the procedure is to agree a recovery plan with the creditors within 90 days.”
It is also expected that a “resizing of the group” will lay the foundations to “emerge stronger from the procedure”.
This resizing of the group will lead to an adjustment of KTM and dealer stocks over the next two years. The result is expected to be a reduction in operational performance in Upper Austria of up to one billion euros over this period.
“The company therefore expects a negative annual result in the very high three-digit range for the current financial year 2024 for the reasons mentioned above,” explains Pierer Mobility AG.
Stefan Pierer: “Pit stop”
Stéphane Piererowner of the group, declares in the same published note: “Over the past three decades, we have become the largest motorcycle manufacturer in Europe. We inspire millions of motorcyclists around the world with our products.”
“Now we are making a pit stop for the future. The KTM brand is my life's work and I am fighting for it”he adds before making an announcement: “The shareholders concerned are committed to KTM and to Pierer Mobility and its IPO”, before setting the objective that “KTM must emerge stronger from these difficult times” .
Since September, Stefan Pierer has been joined by Gottfried Neumeister as co-CEO of Pierer Mobility AG and KTM AG.
Last week, Pierer Mobility AG denied speculation that Red Bull could help it financially..
Until now he has always insisted that the MotoGP project must continue.
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