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Bajaj Auto takes control of KTM to drive its turnaround
Bajaj Auto has injected €200 million of debt support and will infuse the rest of the money ahead of a deadline to pay back creditors, it said
Motorbike maker Bajaj Auto Ltd will buy a controlling stake in Austrian firm KTM AG, lining up a debt funding package of about €800 million ($910 million), the company said in a stock exchange filing on Thursday.
Bajaj Auto has injected €200 million of debt support and will infuse the rest of the money ahead of a deadline to pay back creditors, it said in the exchange filing.
The funding includes a €450 million secured term loan to the maker of MotoGP bikes and €150 million in convertible bonds issued by parent Pierer Bajaj AG.
The firm’s wholly owned Netherlands unit, Bajaj Auto International Holdings, will buy a sole controlling stake in Pierer Bajaj, which owns 75% in Pierer Mobility AG, the listed holding firm of KTM. Bajaj’s unit holds a 49.9% stake in Pierer Bajaj.
The debt package will be used to pay creditors as part of KTM’s court-approved restructuring plan and to revive the company’s operations and working capital cycle.
Bajaj Auto plans to purchase enough shares in Pierer Bajaj AG (PBAG) to gain control.
PBAG is an Austrian company jointly owned by Bajaj Auto International Holdings BV (BAIHBV) and Pierer Industrie AG (owned by Stefan Pierer).
The move marks a significant shift from Bajaj’s previous position as a dormant minority investor to becoming the majority owner, pending regulatory approvals in Austria.
Following the completion of regulatory processes, Bajaj plans to revamp KTM’s governance, reconstitute its board, and launch a turnaround program focused on restoring growth and financial viability.
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