Fight for salvation

KTM bankruptcy: 55 days between tears and triumph

Gottfried Neumeister (left) manages the business of Pierer Mobility AG, the parent company of motorcycle manufacturer KTM, alongside Stefan Pierer (right).

(Bild: Krone KREATIV/Markus Wenzel, KTM/Tschann)

How much money is needed to finance the rescue of KTM? Who are the investors who will step in? Will production remain in Mattighofen? There are many questions that are burning under the nails of the motorcycle manufacturer that has slipped into bankruptcy. Since November 29, the leading company from Mattighofen (Upper Austria) has been a restructuring case. 55 days between tears and triumph: what has happened so far.

It was bad news that few would have thought possible just a few days before, even though serious problems had already become apparent: On November 29, reorganization proceedings were opened over KTM AG, KTM Components GmbH and KTM Forschungs & Entwicklungs GmbH. According to the company, the debts amount to almost two billion euros.

The battle to save the motorcycle manufacturer from Mattighofen has now been going on for more than seven weeks, with the audits scheduled for Friday as part of the restructuring proceedings. The last 55 days have been a rollercoaster of emotions - between tears and triumph. Read here what has happened so far:

• Radical staff cuts: just a few days after the opening of insolvency proceedings, 250 of the approximately 3600 employees were made redundant at the beginning of December. The end came as a shock to most of them, shaking their livelihoods and causing uncertainty and tears. A further 270 employees were recently made redundant. Previously, there had even been talk of up to 500 employees for the second wave of redundancies, but this figure was revised downwards significantly.

• The plug was pulled on production: On December 13, motorcycles were produced in Mattighofen for the last time to date, and the assembly lines have been at a standstill ever since. The traditional Christmas vacation started a week earlier than usual. Production will definitely be suspended until the end of February in order to reduce the enormously high stock levels - 130,000 bikes are said to have been in storage when the insolvency proceedings were opened. An extension of the shutdown is on the cards; at the moment it looks like mid-March.
• The long wait for money: The advance on December salaries and wages promised before the opening of insolvency proceedings came to nothing, KTM is now transferring the money on its usual dates. The December salaries for employees were therefore transferred at the end of December, and the workers received their December wages in mid-January. The insolvency compensation fund recently transferred the outstanding November salaries and wages as well as the majority of the Christmas bonus. The cost: around 20 million euros. 

Probably the most emotional victory in the company's history: Daniel Sanders won the Dakar Rally last week.

(Bild: AFP, REUTERS)

• Fight for revenue: The company wants to get rid of the majority stake in MV Agusta, which it has held since March 2024. It's obviously not quite that simple: negotiations on the sale of the 51% stake in the Italian luxury brand are still ongoing. The takeover of 49% of Pierer Immoreal GmbH in Wels by the motorcycle manufacturer has already been reversed to the previous owner, as confirmed by restructuring administrator Peter Vogl. This has flushed 35 million euros into the coffers of KTM AG.

• Follow-up bankruptcies triggered: The crisis at KTM is also affecting other companies. On December 13, bankruptcy proceedings were opened for Vöcklabrucker Metallgießerei GmbH. VMG Metall is a subsidiary of KTM Components GmbH and the liquidator is looking for a buyer. At the beginning of January, restructuring proceedings were also opened for Avocodo GmbH and Pierer E-Commerce GmbH, two companies from the KTM Group. On January 20, the first supplier had to file for insolvency: RJ - Werkzeugbau GmbH from Mattighofen, which according to KSV1870 has liabilities of around 1.2 million euros, is affected.

• The most emotional triumph in history: KTM entered the Dakar Rally, considered the toughest multi-day motorcycle race in the world, with only three riders. In the end, Daniel Sanders rode to victory for the Mattighofen-based company - a very important sign of life at a time when there is a heated debate about whether to withdraw from racing series in order to save money. The statement on its own social media platforms was clear and unambiguous: "Here to stay," KTM announced and published a jubilant picture of Sanders. 

What happens now? The next important decisions will be made in the Innviertel region: on Friday, January 24th, the examination hearings for the three KTM companies will take place at the regional court in Ried im Innkreis. The day will bring clarity as to how high the creditors' current claims are and thus the level of debt. In addition, KTM AG restructuring administrator Peter Vogl will also report to the court and the creditors on how the company intends to finance the restructuring.

In any case, there is a need for something more tangible than in December, when there was talk of three interested parties (Bajaj, CFMoto and FountainVest). At the Extraordinary General Meeting on Monday, January 27, the Management Board intends to obtain approval to carry out a capital increase.