KTM, the European leader in motorcycles, is reportedly avoiding bankruptcy thanks to a decisive intervention by its Indian partner Bajaj Auto. Bajaj reportedly secured an unsecured loan of €566 million from JPMorgan Chase, DBS Bank, and Citigroup, just before the May 23 deadline set by the Ried im Innkreis court. This amount covers the €548 million required for the restructuring plan, or 30% of the €2,2 billion claimed by KTM's 1 creditors. Without this payment, bankruptcy would have been automatic, threatening the regional economy of Braunau, where the Mattighofen factory supports dozens of suppliers.
It's a turnaround. A few days before the deadline set for May 23 at midnight, KTM is on the verge of avoiding bankruptcy, thanks to a decisive intervention by its historic Indian partner, Bajaj Auto. According to GPone, the Asian manufacturer has obtained a loan of 566 million euros from international banks, thus guaranteeing the financing of the restructuring plan approved by the majority of creditors of KTM.
The situation was critical: 1 creditors claim 200 billion euros, and 600 million in cash was to be deposited before the May 23 to avoid the automatic opening of bankruptcy proceedings in Austria.
For weeks, rumors have been circulating around potential investors (BlackRock, Apollo, Fortress), without a concrete outcome. But Bajaj took everyone by surprise by securing massive financing through JPMorgan Chase, DBS Bank and Citigroup.
Bajaj: from strategic partner KTM to future majority shareholder
Already holder of almost 49% of KTM AG, Bajaj is expected to become the majority shareholder after this transaction, consolidating its industrial control over the company. As a key partner since 2007, Bajaj product in particular all KTM and Husqvarna models up to 390 cc, playing an essential role in the globalization of the orange brand.
In March, the Indian company had already injected 200 million euros to restart production and reduce a frozen stock of 130 motorcycles. But this time, the survival of the entire Austrian group is at stake.
The bankruptcy of KTM would have had catastrophic repercussions for the Mattighofen region in the Braunau district, where dozens of subcontractors and suppliers depend directly on the factory's operations.
« They breathe in Austria. KTM is saved. But an era is ending. ", sums up an observer of the MotoGP paddock. With this recovery in hand, Rajiv bajaj (Vice President of Pierer Mobility AG and CEO of Bajaj Auto) is expected to play a central role in the future of KTMA visionary engineer, he turned around the family group in the 1990s. His pragmatic approach and his eye on emerging markets could transform KTM into a restructured global giant, at a time when the brand is fighting in MotoGP and Supercross.
This rescue is not just a simple bailout: it is the beginning of a new industrial chapter, where India takes over from Austria at the helm of a European motorcycle jewelIf the transfers are confirmed by May 23, then the biggest crisis in modern history of KTM was avoided at the last second. And the MotoGP paddock can breathe a sigh of relief... for now.
