KTM’s financial troubles are one step closer to an end after the creditors approved a plan to restructure the company. This decision was made at a court in Ried im Innkreis, Austria.

Payment Plan

The company had debts totaling 2.25 billion euros, with 2 billion euros being officially recognized. Under the new plan, KTM will pay back 30% of what it owes, which should be around 600 million euros. This payment must be completed by the end of May 2025. Additionally, KTM needs another 150 million euros to restart production at its main factory in Mattighofen by March. This funding will help the company continue its operations for its 2,000 employees until at least May.

Decision

The hearing started at 9:00 AM and was expected to last about three hours. There were 3,847 claims from the creditors and around 100 people attending the session. KTM’s CEOs, Gottfried Neumeister and Stefan Pierer, were also present.

One of the biggest challenges was that KTM owed 1.3 billion euros to 180 different banks. Some of these banks wanted a higher repayment percentage, which complicated whether the plan would be approved. However, just before 2:00 PM, it was confirmed that the creditors had agreed to the restructuring plan.

Next Steps

According to a statement from Pierer Mobility AG, KTM must deposit 548 million euros with a restructuring administrator by May 23, 2025. If this condition is met, the court will confirm the plan in early June, officially marking the end of the restructuring process.

The approval of this plan also ensures that production will increase in mid-March. A group of shareholders has committed 50 million euros to cover March costs. KTM aims to reach full production capacity on four assembly lines within the next three months, using a single-shift operation.

Later in the day, the court also reviewed restructuring plans for two KTM subsidiaries (KTM Components GmbH and KTM Forschungs- & Entwicklungs GmbH). These cases involve smaller amounts of money, and their approval is expected as well.

Searching for an Investor

The final step in KTM’s recovery is securing a new investor, as the company must raise a total of 750 million euros by May 23. The first portion of 50 million euros was already placed into a trust account on Monday.

One of KTM’s biggest stakeholders, Bajaj Auto, which owns 49.9% of the company, provided the mentioned 50 million euro loan to help the process. However, KTM still needs more money. Pierer Mobility AG has stated that an additional 800 million euros is required to fully finance production and stabilize the company.

To attract new investors, KTM has hired Citigroup Global Markets Europe AG to manage the investment process, ensuring it is well-organized and transparent.