Bajaj Auto to take control of Austrian motorcycle maker KTM in ₹7,778-crore deal

India’s most valued two-wheeler maker Bajaj Auto Ltd , through its wholly-owned subsidiary Bajaj Auto International Holdings BV (BAIHBV), will take control of Austria-headquartered KTM in a €800 million (about ₹7,778 crore) deal.

With this, Bajaj will shift gears from hitherto being a dormant minority investor to a majority owner in KTM, while it continues to accelerate the KTM business that is run out of India under the joint development programme, where it develops, makes and sells in India as well as exports to 80 countries across the KTM network.

Bajaj Auto International Holdings BV 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, the Pune-based automaker said in a stock exchange filing. Of the 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.

The KTM rescue deal includes a €450 million secured term loan to KTM and 150 million in convertible bonds issued by Pierer Bajaj AG. The Netherlands-based BAIHBV holds a 49.9% stake in its associate, Pierer Bajaj AG  The remaining controlling stake in PBAG is held by Pierer Industrie AG, owned by entrepreneur Stefan Pierer. PBAG holds around 75% stake in its listed subsidiary, Pierer Mobility AG (PMAG), the holding company of KTM AG, the leading manufacturer of offroad and street motorcycles marketed under the marquee brands of KTM, Husqvarna and GASGAS. Bajaj effectively holds around 37.5% in KTM, through the above chain, prior to this transaction.

“This twin move of taking ownership (subject to approvals) and paring down debt by providing liquidity at a crucial stage, positions Bajaj Auto as a driving force in shaping the future of one of world’s most admired high performance motorcycle companies,” the statement said.

Bajaj Auto said it outlined a set of strategic interventions to address the KTM business’ acute liquidity challenges and enable a structured revival of the brand that has a strong heritage. The proposed equity acquisition by Bajaj of a controlling stake in KTM is a critical step in realigning governance to restore confidence among stakeholders, setting a path for operational restructuring of the business and creating flexibility for potential partnerships, the Rajiv Bajaj-led automaker said.

KTM’s Restructuring Process

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 operation.

On November 28, 2024, KTM AG applied for the initiation of judicial restructuring proceedings with self administration over the assets of KTM AG and its two subsidiaries with an aim to agree a reorganization plan with the creditors within 90 days.

On February 25, 2025, the creditors accepted the restructuring plan submitted by KTM AG. This plan provided for creditors to receive a cash quota of 30% of their claims in the form of a one-time payment to be deposited with the restructuring Administrator by May 23, 2025.

The significant move underscores Bajaj Auto’s commitment to its long-term partnership with KTM and recognising the opportunity in the world of premium and sports motorcycles.

In the event that the liquidity is not made available to and presented before the Administrator/Court latest by May 23, 2025, as per the law in Austria, the three entities are taken out of self-administration and moved irrevocably into an insolvency process.

On sighting of the requisite liquidity in the escrow accounts and confirmation by the Administrator, the Court will confirm the restructuring plan by mid-June 2025 after offering a permissible objection period, post which the quota payment will be released to the creditors and the restructuring proceedings of KTM AG and its subsidiaries will be concluded with legally binding orders.