India’s two-wheeler major Bajaj Auto on Thursday said that it will acquire majority control of Austrian motorcycle company KTM AG through its wholly owned subsidiary, Bajaj Auto International Holdings BV (BAIHBV). The move comes as KTM is undergoing a restructuring process amid an acute financial crisis.
As part of the acquisition plan, BAIHBV has committed €800 million (approximately Rs 7,765 crore) in funding. This includes a €450 million (Rs 4,365 crore) secured term loan to KTM AG and €150 million (Rs 1,455 crore) in convertible bonds issued by Pierer Bajaj AG (PBAG). The investment follows an earlier infusion of €200 million in shareholder debt.
Bajaj Auto believes that the acquisition will aid KTM’s ongoing restructuring, ensure operational continuity, and help expand Bajaj’s global reach in the motorcycle market.
“With this action and post requisite approvals coming through, Bajaj will shift gears from hitherto being a dormant minority investor to a majority owner in the global KTM company, whilst it continues to accelerate the thriving KTM business that is run out of India under the joint development program, where it develops, makes and sells in India as well as exports to 80 countries across the KTM network,” said Bajaj Auto in a statement.
It added, “Simultaneously, BAIHBV has arranged a debt funding package of €800 million to enable the continuity of the KTM business by paying off the approved quota to the creditors in furtherance of KTM's debt restructuring with the approval of the competent Court in Austria and infusing funds into the company to revive its operations and working capital cycle. Of this total €800 million debt package, €200 million has already been infused into the company so far and the balance €600 million is being done now.”
These financial measures are designed to meet a court-imposed deadline of 23 May 2025, by which time 30% of creditor claims must be settled. Failure to do so could lead to insolvency proceedings for KTM and its subsidiaries.
In November 2024, KTM AG and its subsidiaries, KTM Components GmbH and KTM F&E GmbH entered into a self-administrative restructuring process, prompted by acute liquidity challenges that could not service the spiralling debt and working capital constraints that stifled routine business operations.
Bajaj Auto also plans to acquire a controlling interest in PBAG, the parent company of Pierer Mobility AG, which owns KTM AG. Currently, Bajaj Auto holds an indirect 37.5% stake in KTM through PBAG and Pierer Mobility.