It remains turbulent

KTM has to deal with a locust

KTM headquarters in Mattighofen

(Bild: picturedesk.com/Manfred Fesl)

The situation at Austrian motorcycle manufacturer KTM remains turbulent. Even after Stefan Pierer announced his withdrawal from the top of the group, the internationally renowned company, which is currently undergoing debt relief proceedings in court, is still experiencing turbulent days.

An international fund, described by observers as a "typical grasshopper", is currently causing a stir and is attempting to exert influence on the Group in the background using questionable methods. 

According to "Krone" research, the US hedge fund Whitebox has been trying since the opening of insolvency proceedings to buy off the promissory notes owed to KTM by banks in particular. For a considerable discount. Whitebox has also announced its opposition to KTM's restructuring plan. Now, of all times, when international investor interest in getting involved and rescuing the KTM Group has really taken off, as was revealed at the court hearing on Friday. Whitebox is trying to make an alternative plan palatable to creditors.

Austrian insolvency law experts explain to the "Krone" that this plan is, however, "at best half-baked" and "very probably not feasible for legal reasons".

Stefan Pierer

(Bild: Philip Platzer)

"Considerable concerns"
 In fact, the "Krone" has a written report from KTM restructuring administrator Peter Vogl, which the business lawyer sent to the court last week. It states:

"The Whitebox offer is to be compared with the offers of other investors or their effects on a possible quota and assessed accordingly in the run-up to the restructuring plan hearing. The provisions of Austrian insolvency law (including equal treatment, creditors) are unlikely to have been sufficiently taken into account in the whitebox offer." 

The "Krone" asked the restructuring administrator, who confirmed his written report to the court and added: "It is my job to examine such offers for the court and the creditors. I do indeed have considerable reservations as to whether the Whitebox proposal can be implemented in restructuring proceedings under Austrian law. These concerns were also not allayed in a recent meeting with Whitebox."

Storm in ateacup?
The lawyers interviewed by the "Krone" also point out that the announced Whitebox resistance could be a storm in a teacup: Under Austrian law, creditors who buy claims after the opening of insolvency proceedings are namely not allowed to have a say in the judicial reorganization at all. Therefore, Whitebox will probably not be allowed to vote on such claims at the decisive court hearing on February 25, according to legal experts.