Investment bank helps

KTM

Pierer Mobility AG, managed by Gottfried Neumeister (left) and Stefan Pierer (right), has now called in a specialized investment bank to find an investor for KTM.

(Bild: Krone KREATIV/EPA, KTM/Tschann)

Almost 180 banks and financial institutions are creditors of motorcycle manufacturer KTM, which has slipped into insolvency. The debts to lenders alone are said to amount to 1.3 billion euros. Fresh capital is now needed in the fight for restructuring. This is now being sought worldwide. Citigroup's involvement is also seen as a tactical maneuver.

Fresh money is needed so that the restructuring and rescue of KTM can succeed - this message, which Pierer Mobility AG published in the form of a press release on Tuesday evening, comes as little surprise.

After all, given the motorcycle manufacturer's enormous outstanding debts and the liquidity problems that led to the promised advances on December salaries and wages not being paid, it is logical that things will not continue without new capital. And this is now being sought worldwide.

Talks with strategic investors and financial investors
Pierer Mobility is currently in talks with potential strategic investors and financial investors, it is emphasized - both with existing partners and potential new ones. Citigroup Global Markets Europa AG, a renowned investment bank based in the German banking metropolis of Frankfurt am Main, has been commissioned to support the investment process.

"All the stops are being pulled out"
How can Citigroup's involvement be assessed? "It is a positive step for the shareholders of Pierer Mobility because it will hopefully start a transparent process to find sensible partners worldwide. All the stops are being pulled out," says Florian Beckermann, Chairman of the Austrian Investors' Association (IVA). In addition, Stefan Pierer, as the owner, has managed to avoid a conflict of interest: "In retrospect, he cannot be accused of only being concerned about saving the company." As co-owner, Pierer, who has had a huge influence on the brand in recent years, is the focus of public attention, which expects him to contribute to the rescue.

The management has taken steps to open up in order to appeal to as many potential interested parties as possible.

Florian Beckermann, Interessenverband für Anleger

Bild: IVA – Interessenverband für Anleger

KTM AG, KTM Components GmbH and KTM Forschungs & Entwicklungs GmbH, which have all been restructuring cases since November 29, have already relied on a very international network of banks and financial institutions. The creditors include 180 banks and financial institutions - from Unicredit Bank Austria, Raiffeisen Bank International and Erste Group to Oberbank, Bank of China, First Commercial Bank, Hewlett Packard Bank International and Denizbank.

The headquarters of Pierer Mobility AG in Edisonstraße in Wels.

(Bild: Wenzel Markus)

Rumors: complete sale possible
The fact that Pierer Mobility AG spoke about a "reorganization of the ownership structure" in its press release on Tuesday with regard to the search for investors is once again fuelling the rumour mill. There is speculation as to whether Pierer and his partner Bajaj could end up selling KTM. Beckermann does not want to be involved in this: "I think that everyone should work together on a solution to ensure the survival of KTM and its employees in the region."

Fund pays for November salaries and Christmas bonus
The more than 3,650 employees affected by the insolvencies are waiting for their November salaries and the majority of their Christmas bonuses, which will be covered by the insolvency compensation fund. The December salaries and wages are to be paid as usual, according to KTM, after the promise of an advance payment fell through.