Day of truth

Day of truth: How high are KTM’s debts?

The KTM insolvency is heading to the regional court in Ried im Innkreis for the second time. The three hearings will take place here on Friday.

(Bild: Krone KREATIV/EPA, Daniel Scharinger)

The number of creditor claims had climbed from 5380, with more than 20 investors showing interest - this much had already been leaked before the audit day hearings for the three KTM companies. The debts of KTM AG are already on the table: around 2.2 billion euros. March 17 has been set as the start date for the resumption of production.

On February 25, the creditors of KTM AG, KTM Components GmbH and KTM Forschungs & Entwicklungs GmbH will vote on the restructuring plan of the motorcycle manufacturer that has slipped into insolvency. By then at the latest, all the facts must be on the table as to how the company from Mattighofen (Upper Austria) can be rescued and what its future might look like.

The fact is that since the restructuring proceedings with self-administration were opened, work has been underway behind the scenes to find a viable solution. Citibank was also brought in as a renowned partner for the search for investors, which has already borne fruit. More than 20 investors - both national and international - have come forward because they want to participate in the restructuring of the global brand. Pierer Mobility AG also confirmed several financing offers, shortly after the KTM parent company announced that owner Stefan Pierer was handing over the reins to Gottfried Neumeister.

Gottfried Neumeister (left), who will take over the executive chair from Stefan Pierer at KTM AG and Pierer Mobility AG, with KTM AG restructuring administrator Peter Vogl at the first court hearing in Ried on December 20, 2024.

(Bild: Scharinger Daniel)

At the examination hearing on Friday in Ried im Innkreis, the restructuring administrators Peter Vogl (KTM AG), Robert Tremel (KTM Components GmbH) and Franz Mitterbauer (KTM Forschungs & Entwicklungs GmbH) will report on whether the financial plan has been adhered to and also on details of the planned restructuring.

"Three reasons why KTM is still alive"
Gottfried Neumeister, representing the Executive Board, was also present at the first court hearing and said after the first hearing: "There are only three reasons why KTM is still alive: the tireless efforts of our employees, the loyalty of our customers and because we have an intrepid and highly professional insolvency administrator in Mr. Vogl."

The last few weeks have been challenging. Many questions have arisen among the creditors. International creditors needed support. It was very consultation-intensive.

Petra Wögerbauer, KSV1870

Bild: Starmayr

"Many international creditors"
After the first of three audit meetings, there was initial clarity about the status of the debts. The claims against KTM AG amount to around 2.2 billion euros. To date, around 1.6 billion euros of these have been recognized.

The creditor protection associations expect that the claims will continue to rise until the restructuring plan meeting on February 25. "There are many international creditors. We still have requests. There will certainly be some late registrations," says Petra Wögerbauer from Kreditschutzverband von 1870 in Linz.

By winning the Dakar Rally last week, we not only gave a sign of life, but also provided clear proof that KTM can build the best motorcycles in the world.

Gottfried Neumeister, neuer Vorstandschef der Pierer Mobility AG und der KTM AG

Production to be ramped up again on March 17th
Even before the test day meetings, it has been clear in recent days that the situation at KTM has stabilized. January salaries and wages have been secured and liquidity should be ensured by the end of February. The first steps have also been taken to resume production, which will start up again on March 17: talks have begun with suppliers to determine what capacities are needed.

"Sacrifices made by the workforce were severe"
Following the reduction of around 520 employees since the opening of insolvency proceedings, no further job cuts are planned as part of the restructuring process. "The redundancies and the sacrifices made by the workforce were serious enough anyway with short-time working, salary sacrifices and redundancies." KTM AG currently has around 2,000 employees, with 4,400 employees in the group as a whole. At the end of 2023, there should still be 6000 employees.