Fresh money needed

After bankruptcy: KTM throws out the fishing rod for investors

Since November 29, motorcycle manufacturer KTM - here owner Stefan Pierer - has been a restructuring case.

(Bild: Krone KREATIV/Daniel Scharinger, KTM/E. Tschann)

Last Thursday, KTM had to inform its employees that it lacked the liquidity to transfer the promised advances on their December salaries. On Tuesday evening, the motorcycle manufacturer then made it clear that it needs fresh capital to set course for the future. The search for investors is underway and a professional partner is accompanying the talks.

On Tuesday, shortly before 9.45 pm, Pierer Mobility AG, to which KTM belongs, announced that talks are currently underway with potential strategic investors and financial investors in order to raise fresh money for the motorcycle manufacturer, which has slipped into insolvency. On the one hand, these are existing partners with whom talks are being held, while on the other hand, new strategic investors and financial investors are also being approached. Citigroup Global Markets Europe AG has been commissioned to support the process to ensure that the search for investors and funds is structured.

(Bild: Wenzel Markus)

Debts in the billions
A first sign of life from KTM after insolvency proceedings were opened on November 29 for KTM AG, KTM Components GmbH and KTM Forschungs & Entwicklungs GmbH. According to the restructuring applications, the liabilities of the three companies amount to almost two billion euros, experts even put them at around three billion euros.

250 employees have already been made redundant
The insolvency of Europe's leading motorcycle manufacturer came as a shock to more than 3,600 employees, as well as to suppliers, politicians and the people of Austria. A few days later, the company based in Mattighofen (Upper Austria) announced the first 250 redundancies, with a further 500 to follow in January - all measures that are necessary to achieve the restructuring, according to reports.

The aim of the investment process is for investors to subscribe to a necessary cash capital increase or financial instruments of Pierer Mobility AG. These cash funds are to be used to strengthen the Pierer Mobility Group, in particular KTM AG.

Die Pierer Mobility AG über die laufende Investorensuche

Because the warehouses are full, production has been stopped. Friday, December 13, was the last day of production for the time being, and now the company is taking an early Christmas break, with motorcycle assembly coming to a complete standstill in January and February. No wonder: around 130,000 motorcycles are said to be in stock, as KTM itself announced in the course of the restructuring applications.

November salaries and most of the Christmas bonus only in January
The situation means pure uncertainty and is stressful. The employees are waiting for their November salaries and the majority of their Christmas bonuses - both of which are covered by the insolvency compensation fund. However, the transfers will not be made until the end of January. KTM had promised its employees that it would transfer advances on December salaries and wages before Christmas.

There was a lack of liquidity for advances on December salaries
Last Thursday, the workforce was then informed that there was a lack of liquidity and that no advances could be paid. A blow for the employees, which also fueled the rumor mill, as doubts grew louder that the company might have problems continuing operations. On Tuesday evening, Pierer Mobility AG then announced that the search for an investor was in full swing.