Clarity is there

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

The KTM insolvency has now headed to the regional court in Ried im Innkreis for the second time. The three hearings took place here on Friday.

(Bild: Krone KREATIV/EPA, Daniel Scharinger)

The number of creditor claims had recently continued to rise, with more than 20 investors showing interest - this much had already been leaked before the audit meetings for the three KTM companies. On Friday afternoon, all the preliminary figures were on the table: the mountain of debt is almost 2.4 billion euros high. Production is to be ramped up on March 17.

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 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. Several financing offers were also confirmed by Pierer Mobility AG, shortly after the KTM parent company announced that owner Stefan Pierer was handing over the reins to Gottfried Neumeister.

At the audit meetings 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) reported on whether the financial plan had been adhered to and also on details of the planned restructuring. "The search for investors is strictly confidential," emphasized Vogl.

The efforts and endeavors of the last few weeks, above all to find investors, have been fruitful. We were able to convince both equity and debt investors that this company is not only capable of restructuring, but also worth restructuring.

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

"Three reasons why KTM is still alive"
As at the first court hearing, Gottfried Neumeister was also present at the regional court on Friday as a representative of the Executive Board. After the hearing, he seemed relieved and grateful: "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

After the three audit meetings, there was initial clarity about the status of the debts. The claims of all three companies amount to a total of 2.387 billion euros, of which 1.684 billion euros have been recognized so far. At KTM AG alone, creditors have registered claims of around 2.2 billion euros. To date, around 1.6 billion euros of these have been recognized.

"Many international creditors"
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

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," says Vogl. 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 a total of 6000 employees.