KTM to apply for judicial restructuring
Yesterday afternoon (GMT), Pierer Mobility AG, KTM's parent company, announced that it is preparing an application for judicial restructuring proceedings with self-administration. This is seen as a defense against forced liquidation that the company may face soon. KTM needs finance amounting to a high three-digit million EUR figure. This application indicates that management does not expect to be able to secure the necessary interim financing in time. KTM continues to suffer from high inventories at the OEM and dealer levels.
Things have changed fast for Pierer Mobility. The Austria-listed Pierer Mobility AG had a record 2023—revenues of EUR 2.66bn, EBITDA of EUR 323.5m, and motorcycle sales of over 381k units. Even though margins were down and EBITDA declined by 15 percent below 2022, these were fabulous results by any count in an increasingly difficult environment—Russia had invaded Ukraine, and Europe was slowing down yet again. KTM’s product pipeline remained strong, and the iconic historic brand MV Agusta was acquired only two weeks back.
Pierer Mobility would even announce a dividend of EUR 0.5/share, a share trading around EUR 50 at that time.
That share is now down to EUR 9.7 as of yesterday's close of trade, and KTM is in trouble.
The European and North American markets for expensive lifestyle motorcycles are under pressure as customers clamp down on discretionary purchases. KTM has been a victim as sales have slowed drastically over the last three quarters. Quality problems also plagued the company as customers reported issues with the camshafts of the LC8C engines on the 790/890 models. The company was late in addressing the problems.
Pierer Mobility AG had a bad first half of the year, so it canceled the 2024 guidance and reduced the executive board to two from six, removing Hubert Trunkenpolz (the T in KTM) from the board.
Mounting debt is one of the bigger problems—at the end of 2023, Pierer Mobility’s debt had reached EUR 776m, a sharp spike from EUR 190m in 2021.
This had nearly doubled to EUR 1.5bn at the close of H1 2025. Pierer Mobility attributes the increase in debt to an increase in working capital, which supports its dealers and suppliers and cushions them from increased interest rates.
H1 2024 was also when sales collapsed across the brands.
The media has been speculating on the savior since KTM’s financial problems came to light. India-based Bajaj Auto, a 49.9 percent shareholder in Pierer AG and long-term partner, is the top choice. Bajaj is flush with cash but has not yet made a move.
Austrian businessman and Red Bull heir Mark Mateschitz was also rumored to be interested in investing in KTM, but Pierer Mobility has since denied the rumors.
Impact
Bajaj must save them, or the European and global performance market will change dramatically. Any KTM collapse would likely speed up the Chinese domination of the global power sports market. If Bajaj saves them, owning KTM would also change the play in the Indian and European E2W markets. We will revisit this subject in a weekly analysis soon.
